Digital media and marketing software company Adobe (ADBE) Late Thursday, it beat Wall Street's targets for the fiscal first quarter but gave a lackluster outlook for the current period. Adobe stock fell in extended trading.
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The San Jose, Calif.-based company earned adjusted earnings of $4.48 per share on sales of $5.18 billion in the quarter ended March 1. Analysts polled by FactSet had expected Adobe's earnings to be $4.38 per share on sales of $5.14 billion. Year over year, Adobe's profits rose 18% while sales increased 11%.
For the current quarter, Adobe expects adjusted earnings of $4.38 per share, in line with analyst estimates, based on the middle of its guidance. It expected sales of $5.28 billion, below consensus estimates of $5.31 billion for the fiscal second quarter. In the year-ago quarter, Adobe earned adjusted $3.91 per share on sales of $4.82 billion.
Separately, Adobe announced a new $25 billion stock buyback program.
Adobe Stock drops after report
After hours trading on the stock market today, Adobe stock fell more than 10% to 511.84. During Thursday's regular session, Adobe stock fell 0.5% to close at 570.45.
“Adobe achieved record revenue in the first quarter demonstrating strong momentum across Creative Cloud, Document Cloud and Experience Cloud,” CEO Shantanu Narain said in a statement. New release. “We have done a fantastic job of harnessing the power of generative AI to deliver groundbreaking innovations across our product portfolio.”
Adobe shares fell last month on concerns that competing AI tools, such as OpenAI's Sora, could hurt sales of its software to creative professionals. But Adobe is incorporating its own generative AI, branded Firefly, into its creative software.
Adobe stock has an IBD Composite Rating of 85 out of 99, according to IBD inventory check.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz For more stories on consumer technology, software and semiconductor stocks.
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