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: Adobe stock heads toward fresh record highs after earnings

Adobe Inc. shares headed toward new records Thursday afternoon, after revealing an “outstanding” second quarter on the strength of cloud software in what Chief Executive Shantanu Narayen calls “a digital-first world.”

The maker of Photoshop and other media and marketing software reported net income of $1.12 billion, or $2.32 a share, compared with $1.1 billion, or $2.27 a share, in the year-ago period. Adjusted for stock-based compensation and other costs, earnings were $3.03 a share. Revenue rose to $3.84 billion from $3.13 billion in the year-ago quarter.

Analysts surveyed by FactSet had forecast adjusted earnings of $2.81 a share on revenue of $3.73 billion.

Adobe
ADBE,
+1.48%

shares climbed more than 2.5% after hours, after rising almost 1.5% in the regular session to close at $551.36. If the gains hold, Adobe would be on track to top its intraday record of $561.36 and closing record price of $556.95, both of which were established on Monday.

The San Jose, Calif.-based company said revenue from its Digital Media, Creative and DocumentCloud products grew 25%, 24% and 30% respectively year-over-year. The company also said it had a record $1.99 billion in cash flows from operations.

Adobe expects adjusted third-quarter earnings of $3 a share on revenue of $3.88 billion, while analysts had forecast earnings of $2.89 a share on revenue of $3.83 billion.

Shares of Adobe have risen nearly 10% year to date and are up about 22% in the past three months. By comparison, the S&P 500 index
SPX,
-0.04%

is up about 12.5% so far this year.

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