Digital media and marketing software firm Adobe (ADBE) late Wednesday beat Wall Street’s targets for its fiscal fourth quarter but disappointed with its outlook. ADBE stock fell in extended trading.
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The San Jose, Calif.-based company earned an adjusted $4.27 a share on sales of $5.05 billion in the quarter ended Dec. 1. Analysts polled by FactSet had expected Adobe earnings of $4.13 a share on sales of $5.01 billion. On a year-over-year basis, Adobe earnings rose 19% while sales increased 12%.
For the current quarter, Adobe predicted adjusted earnings of $4.38 a share on sales of $5.13 billion. That’s based on the midpoint of its guidance. Wall Street was modeling earnings of $4.26 a share on sales of $5.16 billion in the fiscal first quarter. Its guidance would translate to year-over-year growth of 15% in earnings and 10% in sales.
For its full fiscal 2024, Adobe forecast adjusted earnings of $17.80 a share, up 11%, on sales of $21.4 billion, up 10%. Analysts were expecting earnings of $18 a share on sales of $21.73 billion.
ADBE Stock Sinks After Report
In after-hours trading on the stock market today, ADBE stock dropped 6.2% to 585.35. During the regular session Wednesday, ADBE stock slid 1.5% to close at 624.26.
Adobe Chief Executive Shantanu Narayen said the company experienced “strong momentum” in fiscal 2023 across its Creative Cloud, Document Cloud and Experience Cloud services.
“Adobe’s strategy, category leadership, groundbreaking innovation, exceptional talent and global customer base position us well for 2024 and beyond,” he said in a news release.
One overhang on ADBE stock is the company’s pending acquisition of Figma. Government regulatory reviews threaten to block that $20 billion deal from closing.
ADBE stock is on IBD’s Big Cap 20 and Tech Leaders stock lists.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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