Adobe Shares Fall on Weak Outlook
Adobe Systems Inc. on Tuesday gave an outlook for its coming fiscal year that was lower than Wall Street expected, pummeling the company's shares.
In recent after-hours trading, Adobe shares dropped 8.8% to $77.65. Through Tuesday's close, the stock had risen 26% in the past 12 months.
Adobe projected adjusted earnings for its 2016 business year of about $2.70 a share on about $5.7 billion in revenue. Analysts polled by Thomson Reuters had forecast per-share earnings of $3.19 and revenue of $5.93 billion.
Adobe, famous for its publishing software like Photoshop that is widely used by creative types, as well as popular Flash software, has benefited recently from higher digital-media revenue. It forecast digital-media revenue growth of about 20% in fiscal 2016 and annually through 2018.
In its third quarter of this year, the latest available, the company posted digital media revenue of $769.7 million, up 24% from the same period a year earlier.
The company in mid-September announced a leadership shake-up, as David Wadhwani, its senior vice president and general manager for digital media, left to take a chief executive post at AppDynamics Inc. Bryan Lamkin, who previously headed the document cloud business, stepped up to lead a combined digital-media business.
On Tuesday, the San Jose, Calif., company also provided longer-term forecasts, saying it expected compound annual growth rates from 2015 to 2018 of about 20% for revenue and about 30% for adjusted earnings per share.
(By Nathan Becker)