Why Adobe (ADBE) Stock Is Falling in After-Hours Trading Today

NEW YORK (TheStreet) -- Adobe (ADBE) was falling 3.9% to $67.99 after-hours Tuesday after guiding below analysts' estimates for the fiscal fourth quarter, and despite beating estimates for earnings in the fiscal third quarter.

For the fiscal third quarter the software developer reported earnings of 28 cents a share, beating the 26 cents a share estimate from analysts surveyed by FactSet. Revenue grew 0.4% year over year to $1 billion for the quarter, compared to analysts' estimates of $1.02 billion.

Looking forward to the fiscal fourth quarter Adobe expects earnings of 26 cents to 32 cents a share, compared to analysts' estimates of 31 cents a share for the quarter. The company expects revenue of $1.025 billion to $1.075 billion for the upcoming quarter, below analysts' estimates of $1.09 billion.

Adobe ended the quarter with 2.81 million paid Creative Cloud subscribers, an increase of 502,000 from the previous quarter. The company said that 63% of its revenue in the quarter came from recurring sources include Creative Cloud and Creative Marketing Cloud subscriptions.

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TheStreet Ratings team rates ADOBE SYSTEMS INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate ADOBE SYSTEMS INC (ADBE) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

You can view the full analysis from the report here: ADBE Ratings Report

ADBE Chart ADBE data by YCharts

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