Why Adobe’s Record Quarter Wasn’t Enough for Investors

September 17, 2019 by Chris Lange

Adobe Inc. (NASDAQ: ADBE) released its fiscal third-quarter earnings report after the markets closed on Tuesday. The firm posted $2.05 in earnings per share (EPS) and $2.83 billion in revenue, compared with consensus estimates that called for $1.97 in EPS and $2.82 billion in revenue. The same period of last year reportedly had $1.73 in EPS and $2.29 billion in revenue.

Digital Media segment revenue increased 22% year over year to $1.96 billion. Creative revenue grew to $1.65 billion, and Document Cloud achieved revenue of $307 million. Digital Media annualized recurring revenue (ARR) grew to $7.86 billion by the end of the quarter, a quarter-over-quarter increase of $386 million. Creative ARR grew to $6.87 billion, and Document Cloud ARR grew to $993 million.

Separately, Digital Experience segment revenue increased by 34% to $821 million.

Looking ahead to the fiscal fourth quarter, the company expects to see EPS of roughly $2.25 and revenue near $2.97 billion. Consensus estimates call for $2.30 in EPS and $3.03 billion in revenue for the quarter.

Shantanu Narayen, president and CEO of Adobe, commented:

Customers across every industry continue to rely on Adobe to run their businesses, transform how they work, and bring their creative ideas to life as reflected in our record Q3 results. We’re excited for the opportunities in front of us and confident in our ability to drive strong top-line and bottom-line growth.

Shares of Adobe closed at $284.69, in a 52-week range of $204.95 to $313.11. The consensus price target is $312.92. Following the announcement, the stock was down over 3% at $274.98 in the after-hours session.


Essential Tips for Investing: Sponsored

A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.