Adobe Shares Plunge on Lower-Than-Expected Q4 Sales and EPS Guidance

Thursday’s extended trading saw a sharp decline in Adobe (ADBE) shares after the company’s fiscal fourth-quarter projection failed to meet analyst expectations. The software company stated that, contrary to Visible Alpha’s projections, it expects sales for the fourth quarter of between $5.50 billion and $5.55 billion. It predicted $3.58 to $3.63 in diluted earnings per share (EPS), with analysts anticipating the higher end of that range. In the wake of the company’s earnings release, Adobe shares dropped more than 9% during Thursday’s extended session. However, at the time of writing, stocks were up 1.06%.

Adobe’s Record Q3 EPS and Revenue Highlighted by a Cautious Forecast

An otherwise excellent report featuring third-quarter numbers that were above projections was overshadowed by Adobe’s less optimistic than anticipated outlook. EPS increased to $3.76 from $3.05 in the previous year, and Adobe reported third-quarter sales of $5.41 billion, an 11% increase over the previous year. Adobe’s Digital Media division, which offers Creative Cloud subscriptions, reported net-new annualized recurring revenue (ARR) of $504 million, setting a record and exceeding analysts’ expectations by 8%.

Adobe’s record Q3 performance is a testament to our relentless innovation and commitment to delivering value to our customers,

Adobe CEO Shantanu Narayen

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