Adobe stock experiences a decline in soft fourth-quarter revenue expectations.
- Wall Street expectations for sales and earnings were surpassed by Adobe in their third-quarter results, which were reported on Thursday.
- The stock's performance in extended trading was affected by the fourth-quarter guidance that fell short of expectations.
On Thursday, the company reported third-quarter results that exceeded Wall Street expectations for sales and earnings. However, the stock dropped 10% in extended trading after the fourth-quarter guidance fell short.
LSEG consensus estimates were exceeded by Adobe in the quarter ending in August.
- Revenue: $5.41 billion, vs. $5.37 billion expected
- Earnings per share: $4.65, adjusted, vs. $4.53 estimated
Adobe predicted that its earnings per share would be between $4.63 and $4.68 on revenue of between $5.5 billion and $5.55 billion in the fourth quarter. Analysts surveyed by LSEG forecasted earnings of $4.67 on $5.61 billion of sales.
During the quarter, Adobe recorded $1.68 billion of net income, which translates to $3.76 per diluted share, compared to $1.40 billion, or $3.05 per share in the previous year.
Sales of Adobe's Digital Media line, which includes Creative Cloud subscriptions with generative AI called Firefly, increased by 11% annually to reach $4 billion.
During the quarter, Adobe generated $5.18 billion in subscription revenue, representing a 11% increase compared to the previous year.
Technology
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