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: Adobe stock heads toward fresh record highs after earnings

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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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