Shares of Adobe (ADBE) are down 6% after the software company issued a weaker-than-expected forecast for 2024.
For its fiscal fourth quarter, Adobe reported earnings per share of $4.27 U.S. compared to $4.14 U.S. that was forecast on Wall Street.
Revenue in the quarter totaled $5.05 billion U.S. versus $5.03 billion U.S. that had been expected among analysts.
The company’s revenue grew 12% from a year ago while its net income increased 26% to $1.48 billion U.S., or $3.23 U.S. a share.
During the quarter, Adobe increased the costs of some of its software subscriptions.
However, while the results topped Wall Street estimates, Adobe’s forward guidance for its next fiscal year disappointed analysts and investors.
Adobe called for fiscal 2024 earnings per share of $17.60 U.S. to $18 U.S. on $21.3 billion U.S. to $21.50 billion U.S. in sales.
Analysts had been looking for $18 U.S. in adjusted earnings per share and $21.73 billion U.S. of revenue.
In its most recent quarter, Adobe’s Firefly generative artificial intelligence (AI) feature became available in the company’s Photoshop and Illustrator programs for its Creative Cloud subscribers.
Additionally, Adobe continues to work on closing its $20 billion U.S. acquisition of privately held Figma that was announced in September 2022.
Adobe said in a separate regulatory filing that it is working with the U.S. Federal Trade Commission (FTC) on an inquiry over its cancellation and subscription practices. The company said this matter might have a material effect on its financial performance going forward.
Before today (Dec. 14), Adobe’s stock had increased 85% in 2023 to trade at $624.26 U.S. per share.
