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(Bloomberg) – Adobe Inc. fell around 4% in extended trading after strong sales outlook for the current period failed to impress investors who pushed the stock up nearly 30% this year.
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Revenue will be around $ 4.07 billion in the fiscal fourth quarter, the San Jose, Calif., Based company said in a statement on Tuesday. Earnings, excluding certain items, will be approximately $ 3.18 per share. Analysts were on average forecasting sales of $ 4.04 billion and earnings of $ 3.08 per share, according to data compiled by Bloomberg.
Managing Director Shantanu Narayen showcased creative new software tools to continue Adobe’s steady 20% revenue growth. As part of the effort, the company announced last month that it would acquire Frame.io, a startup that makes video collaboration software, for $ 1.3 billion. Document Cloud products, including PDF and electronic signature software, have also grown with millions of people working from home.
Gregg Moskowitz, analyst at Mizuho Securities, said in a note ahead of the results release that the web business of the company’s Digital Media unit, which includes authoring and document cloud products such as Photoshop and Illustrator, “seems to have remained strong, and our Digital Experience Cloud controls were quite good, with continued indications of very healthy demand.” Adobe’s Digital Experience unit includes the company’s marketing and analytics software .
Digital media revenues will increase by around 20% and the digital experience will jump 22% in the fiscal fourth quarter, Adobe said. Both projections exceeded analysts’ estimates.
In the fiscal third quarter, sales were up 22% to $ 3.94 billion and profit, excluding certain items, was $ 3.11 per share. Analysts on average estimated revenue of $ 3.89 billion and adjusted earnings of $ 3.01 per share.
Digital media revenues jumped 23% to $ 2.87 billion during the period ended September 3. Digital Experience sales increased 26% to $ 985 million.
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