Digital media and marketing software firm Adobe (ADBE) late Thursday beat Wall Street’s targets for its fiscal first quarter but gave a lackluster forecast for the current period. Adobe stock fell in prolonged trading.
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The San Jose, Calif.-based company earned an adjusted $4.48 a share on sales of $5.18 billion throughout the quarter ended March 1. Analysts polled by FactSet had expected Adobe earnings of $4.38 a share on sales of $5.14 billion. On a year-over-year basis, Adobe earnings rose 18% while sales increased 11%.
For the current quarter, Adobe predicted adjusted earnings of $4.38 a share, in step with analyst estimates, based on the midpoint of its guidance. It forecast sales of $5.28 billion, which was wanting the consensus estimate of $5.31 billion for the fiscal second quarter. Inside the year-earlier quarter, Adobe earned an adjusted $3.91 a share on sales of $4.82 billion.
Individually, Adobe announced a modern $25 billion share repurchase program.
Adobe Stock Topples After Report
In after-hours trading on the stock market today, Adobe stock plunged greater than 10% to 511.84. Through the regular session Thursday, Adobe stock dipped 0.5% to shut at 570.45.
“Adobe drove record Q1 revenue demonstrating strong momentum across Creative Cloud, Document Cloud and Experience Cloud,” Chief Executive Shantanu Narayen said in a news release. “Now we have done an incredible job harnessing the flexibility of generative AI to deliver groundbreaking innovation across our product portfolio.”
Adobe stock tumbled last month over concerns that competing generative artificial-intelligence tools, resembling Sora from OpenAI, could hurt sales of its software for creative professionals. But Adobe is integrating its own generative AI, branded Firefly, into its creative software.
Adobe stock has an IBD Composite Rating of 85 out of 99, in accordance with IBD Stock Checkup.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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