Adobe beats the consensus, but makes cautious predictions




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(Boursier.com) — The graphics software publisher Adobe released Thursday evening results and sales exceeding market expectations for its second fiscal quarter, but disappointed by making a cautious forecast, citing an “uncertain” environment, and citing negative currency effects and the fallout from the war in Ukraine.

On Wall Street, the title Adobe yo-yoed on Friday, before ending down 1.18% to $360.79, after these announcements. This brought the stock’s decline to more than 36% since the start of the year.

For its second fiscal quarter ended on June 3, the group known for its InDesign, Photoshop and Acrobat products, generated a net profit of 1.18 billion dollars, up 6% over one year. Adjusted net earnings per share came in at $3.35, versus $3.31 expected by analysts of the FactSet consensus.

The quarterly sales hit $4.39 billion, up 14% year on year, slightly above expectationshoused at $4.34 billion.

On the other hand, management has revised down its annual forecast to $13.50 in earnings per share for revenue of $17.65 billion, while analysts were hoping for $13.66 and $17.85 billion respectively. In December, Adobe had forecast EPS of $13.70 and sales of $17.90 billion for the fiscal year ending at the end of November.

A strong dollar penalizing multinationals

Adobe thus joins a cohort of technology companies, including Microsoft and Salesforce, which reported a negative impact of the strong dollar on their revenues, leading to a downward revision of their annual forecasts. The dollar, buoyed by rate hikes from the Federal Reserve to curb inflation, has in recent days hit 20-year highs against a basket of currencies including the euro, yen and pound sterling.

A strong dollar makes American exports less competitive on the one hand, and on the other hand reduces income earned in other currencies and converted into dollars in the accounts of multinationals.



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