Digital media and marketing software firm Adobe late Tuesday topped Wall Street's targets for its fiscal first quarter. But its guidance for the current quarter came up short after the company halted sales in Russia and Belarus. ADBE stock fell in extended trading.
The San Jose, Calif.-based company earned an adjusted $3.37 a share on sales of $4.26 billion in the quarter ended March 4. Analysts had expected Adobe earnings of $3.34 a share on sales of $4.24 billion. On a year-over-year basis, Adobe earnings rose 7% as sales increased 9%.
For the current quarter, Adobe forecast adjusted earnings of $3.30 a share on sales of $4.34 billion. Analysts were predicting earnings of $3.35 on sales of $4.4 billion. Adobe's guidance includes the impact of halting sales in Russia and Belarus in response to Russia's invasion of Ukraine.
Adobe said the lost business in Russia and Belarus would lower its annualized recurring revenue by $75 million. Also, it expects the conflict to lower its annualized recurring revenue in Ukraine by $12 million. All told, it forecast a reduction in annualized recurring revenue of $87 million and an expected revenue impact of $75 million in its fiscal 2022.
ADBE Stock Drops Late
In after-hours trading on the stock market today, ADBE stock sank 2.2%, near 456. During the regular session Tuesday, ADBE stock rose 2.8% to close at 466.45.
"Adobe's Q1 results reflect the company's strong execution and resilience through unprecedented circumstances," Chief Financial Officer Dan Durn said in a news release. "Our momentum, product innovation and immense market opportunity position us for success in 2022 and beyond."
Adobe has three cloud-computing businesses. Its largest, Creative Cloud, includes software for creative professionals such as Photoshop and Illustrator. Document Cloud includes its Acrobat and e-signature offerings. Experience Cloud provides marketing software and services.
ADBE Stock Has Middling Composite Rating
ADBE stock hit an all-time high of 699.54 on Nov. 22 ahead of the company's fiscal fourth-quarter report. Adobe earnings met expectations while sales beat views in the quarter ended Dec. 3. However, guidance for fiscal 2022 missed estimates.
ADBE stock has a mediocre IBD Composite Rating of 58 out of 99, according to IBD Stock Checkup. IBD's Composite Rating combines five separate proprietary ratings into one easy-to-use score. The best growth stocks have a Composite Rating of 90 or better.
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