The stock of Adobe (ADBE) is down 12% after the software company issued forward guidance that disappointed analysts on Wall Street.
The company behind popular products such as Photoshop and Illustrator reported strong financial results for what was its fiscal first quarter.
Adobe announced earnings per share (EPS) of $4.48 U.S. versus $4.38 U.S. that was expected among analysts who cover the company.
Revenue in the quarter came in at $5.18 billion U.S. compared to $5.14 billion U.S. that was anticipated. Sales grew 11% from a year earlier.
During the quarter, Adobe canceled its planned $20 billion U.S. acquisition of design software start-up Figma and had to pay a $1 billion U.S. termination fee.
Adobe also unveiled an artificial intelligence (A.I.) assistant for its Reader and Acrobat apps in recent months.
Prior to the latest earnings print, Adobe’s stock had been hurt when privately held OpenAI introduced Sora, an A.I. platform that can generate videos based on written descriptions.
In terms of guidance, Adobe forecast earnings of $4.35 U.S. to $4.40 U.S. a share and revenue of $5.25 billion U.S. to $5.30 billion U.S. for the current quarter.
Analysts surveyed by LSEG had expected earnings of $4.38 U.S. per share and $5.31 billion U.S. in revenue.
Management said recurring revenue should accelerate in the second half of this year, and announced a $25 billion U.S. share repurchase program.
Prior to today (March 15), Adobe’s stock was down 2% this year and trading at $570.45 U.S. per share.
