Adobe Shares Drop After Company’s Full Year Projections Disappoint

Shares of software company Adobe were heading lower on Thursday after full-year projections fell short.

The company also announced a higher price for some Creative Cloud subscriptions in the quarter.

The stock fell as much as 5% in extended trading on Thursday after the design software maker gave full-year guidance that fell short of analysts’ expectations.

For the second quarter, earnings came in at $3.35 a share adjusted.

This is versus the $3.31 per share as expected by analysts, according to Refinitiv.

Revenue at $4.39 billion was higher than the $4.34 billion as expected by analysts, according to Refinitiv.

For the full fiscal year, Adobe reduced its guidance. It called for $13.50 in adjusted earnings per share on $17.65 billion in revenue. Analysts polled by Refinitiv had expected $13.66 in adjusted EPS and revenue of $17.85 billion. In December the guidance for the 2022 fiscal year was $13.70 in adjusted earnings per share and $17.90 billion in revenue.

The company cited the war in Ukraine, a $175 million foreign-exchange headwind, and summer seasonality.

The economic environment in the quarter was “uncertain,” Dan Durn, Adobe’s finance chief, said on a conference call with analysts. Durn noted that management was happy with the company’s success in talent acquisition in what he called a competitive labor market.

During the quarter ended June 3, the company’s revenue grew 14% year over year, according to a statement. Adobe’s net income in the fiscal second quarter, at $1.18 billion, was up about 6%.

Adobe ended the quarter with $4.88 billion in deferred revenue, down from $5.02 billion three months earlier and below the StreetAccount consensus of $5.00 billion. It had over $5 billion in cash, cash equivalents and short-term investments.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.