Adobe offers a tepid third-quarter outlook, prompting shares to drop in after-hours trading.
The software company didn’t detail reasons for the outlook in its press release, though there have been concerns about recent Creative Suites upgrade cycle and fallout from the weak European economy.
More details are expected on the conference call, which will start shortly.
Adobe shares, down 4.7% during the past three months, fall another 4.7% to $31.35 in late trading.
Adobe is converting its business to subscriptions from a licensed software model. The company said it achieved better-than-expected success introducing its subscription plans in the quarter, “but the more successful you are at converting your business to subscriptions the more it hurts your near-term results,” said Pat Walravens, an analyst at JMP Securities.
Part of every subscription sale is booked to deferred revenue recognized in future quarters. Subscriptions pay off with a stronger future revenue stream, but in the meantime “transitions are tough,” said Walravens.
Adobe projects third-quarter earnings, excluding certain items, in a range of 56 cents to 61 cents, on revenue of $1.075 billion to $1.125 billion. On average, analysts projected EPS of 61 cents on revenue of $1.13 billion.
*** day after earnings ***
** 2 months later, ADBE still trading in the same range **
No comments:
Post a Comment