NEW YORK (AP) — Adobe Systems rose 6 percent before Wednesday's opening bell after the software maker reported strong first-quarter results.
Citi analyst Walter Pritchard backed his "Buy" rating for Adobe, saying that a surprisingly strong bump in subscriptions did not adversely affect the company's top line.
"We believe stock performance from here hinges on the ability to achieve subscription targets," Pritchard wrote.
The company has been shifting its business to a subscription format and said it gained 153,000 Creative Cloud subscriptions over the three months ended March 1, as the pace of new subscriptions increased.
Excluding one-time items, the San Jose, Calif., company earned 35 cents per share, beating Wall Street predictions by 4 cents per share. Revenue fell 4 percent to $1.01 billion, but that still topped analyst expectations.
Jefferies analyst Ross MacMillan was more skeptical, saying that while the company's goals for the second half of the year seem "very achievable," the pace of subscriber growth needs to pick up. He maintained a "Hold" rating on the stock.
Shares of Adobe Systems Inc. rose $2.36 to $43.11 in premarket trading.