Friday’s trading saw a drop of over 16% in the value of shares in Adobe Inc. (ADBE). This came after the computer software company revealed a weak outlook for sales in the current quarter.
Adobe loses value as weak sales predicted
The company’s revenue is expected to be between $5.25bn and $5.3bn this quarter, according to a statement released on Thursday. This falls slightly short of the initial projections of $5.31bn. However, profits are expected to exceed predictions, reaching as high as $4.40 per share rather than analysts’ average estimate of $4.38.
ADBE has been a leading name in the software industry for several years, with various products aimed at professionals in the creative arts. In recent months, fears have grown that the new wave of artificial intelligence (AI) technology could impact its sales, which has caused Adobe to add its own AI model, Firefly, to its suite of products.
Shantanu Narayen, the chief executive officer of Adobe, said that “expectations were perhaps a little higher in terms of what we would guide”. The company’s expectations for the current quarter are $440m in revenue for new business, below the $459m that analysts had predicted.
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This led to the poorest day of trading for ADBE since September 2022, as its shares dropped to $492.46. Adobe also became the latest major company to announce a shares buyback scheme, with $25bn set to be invested in this way.
