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Adobe stock slips on soft fourth-quarter revenue guidance

Adobe reported third-quarter results on Thursday that beat Wall Street expectations for sales and earnings. Read more...

Adobe CEO Shantanu Narayen speaks during an interview with CNBC on the floor of the New York Stock Exchange on Feb. 20, 2024.

Brendan Mcdermid | Reuters

Adobe reported third-quarter results on Thursday that beat Wall Street expectations for sales and earnings, but the stock slid 10% in extended trading on fourth-quarter guidance that came up short.

Here is how Adobe did for the quarter ending in August versus LSEG consensus estimates:

  • Revenue: $5.41 billion vs. $5.37 billion expected
  • Earnings per share: $4.65 adjusted vs. $4.53 estimated

Adobe said it expected earnings per share between $4.63 and $4.68 on revenue of between $5.5 billion and $5.55 billion in the fourth quarter. Analysts polled by LSEG were expecting a forecast of $4.67 in earnings per share on $5.61 billion of sales.

Adobe said it recorded $1.68 billion of net income during the quarter, or $3.76 per diluted share. That is up from $1.40 billion, or $3.05 per share, in the year-ago period.

Adobe’s biggest line of business, Digital Media, which includes the company’s Creative Cloud subscriptions that use generative artificial intelligence called Firefly, grew 11% on an annual basis to sales of $4 billion.

In total, Adobe recorded $5.18 billion in subscription revenue during the quarter, up 11% year over year.

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