(Bloomberg) -- Adobe Inc. dropped about 4% in extended trading after a strong sales outlook for the current period failed to impress investors who have pushed up the stock almost 30% this year.
Revenue will be about $4.07 billion in the fiscal fourth quarter, the San Jose, California-based company said Tuesday in a statement. Profit, excluding some items, will be about $3.18 a share. Analysts, on average, projected sales of $4.04 billion and earnings of $3.08 a share, according to data compiled by Bloomberg.
Chief Executive Officer Shantanu Narayen has pitched new creative software tools to continue Adobe’s steady 20% revenue growth. As part of that effort, the company said last month it would acquire Frame.io, a startup that makes video collaboration software, for $1.3 billion. Document Cloud products, including PDF and electronic signature software, also have surged with millions working from home.
Gregg Moskowitz, an analyst at Mizuho Securities, said in a note before the results were released that web activity for the company’s Digital Media unit, which includes creative and document cloud products such as Photoshop and Illustrator, “appears to have remained strong, and our Digital Experience Cloud checks were quite good, with ongoing indications of very healthy demand.” Adobe’s Digital Experience unit includes the company’s marketing and analytics software.
Revenue from digital media will increase about 20% and digital experience will jump 22% in the fiscal fourth quarter, Adobe said. Both projections topped analysts’ estimates.
In the fiscal third quarter, sales gained 22% to $3.94 billion and profit, excluding some items, was $3.11 a share. Analysts, on average, estimated revenue of $3.89 billion and adjusted profit of $3.01 a share.
Revenue from digital media jumped 23% to $2.87 billion in the period ended Sept. 3. Sales in digital experience increased 26% to $985 million.