Digital media and marketing software company adobe (adobe) late Thursday beat Wall Street’s expectations for the fiscal first quarter, but gave a tepid outlook for the current fiscal year. Adobe stock fell in after-hours trading.
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The San Jose, California-based company had revenue of $5.18 billion and adjusted earnings per share of $4.48 for the quarter ended March 1. Analysts polled by FactSet had expected Adobe to earn $4.38 per share on revenue of $5.14 billion. Year-over-year, Adobe’s revenue increased by 18%, and sales increased by his 11%.
Adobe projected adjusted earnings of $4.38 per share for the current quarter, in line with analyst expectations, based on the midpoint of its guidance. The company expected revenue of $5.28 billion, which fell short of the consensus estimate of $5.31 billion for the second quarter. In the same period last year, Adobe had revenue of $4.82 billion and adjusted earnings per share of $3.91.
Separately, Adobe announced a new $25 billion stock buyback program.
Adobe Stock plummets after the news
Adobe stock plummeted more than 10% to 511.84 in after-hours trading on the stock market. During regular trading Thursday, Adobe stock fell 0.5% to close at 570.45.
“Adobe delivered record revenue growth in the first quarter and demonstrated strong momentum across Creative Cloud, Document Cloud, and Experience Cloud,” said CEO Shantanu Narayan. news release. “We have done a great job of leveraging the power of generative AI to deliver breakthrough innovations across our product portfolio.”
Adobe stock fell last month on concerns that competing generative artificial intelligence tools, such as OpenAI’s Sora, could hurt sales of the company’s software for creative professionals. However, Adobe is integrating his Firefly brand of proprietary generative AI into its creative software.
According to IBD, Adobe stock has an overall rating of 85 out of 99. IBD inventory diagnosis.
Follow Patrick Seitz on X (formerly Twitter). @IBD_PSeitz Check out more articles on consumer technology, software, and semiconductor stocks here.
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