Adobe Posts Strong Earnings. Why It Wasn’t Enough to Boost the Stock.

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Adobe

‘s fiscal third-quarter earnings and sales beat expectations, but the results weren’t enough to send shares higher in extended trading.

For the quarter ended Sept. 3,

Adobe

(ticker: ADBE) reported revenue of $3.94 billion, up 22% year over year. It was a quarterly sales record for the creative-software company, topping Wall Street’s consensus estimate of $3.89 billion, according to FactSet. Non-GAAP earnings of $3.11 a share also beat consensus estimates at $3.01 a share.

But Adobe shares have risen more than 40% in the past six months following a string of better-than-expected quarters. Better-than-consensus results may have already been priced in the stock. The stock was down 3.9% to $620.80 in after-hours trading following the report.

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“Adobe had another outstanding quarter as Creative Cloud, Document Cloud and Experience Cloud continue to transform storytelling, learning and conducting business in a digital-first world,” CEO Shantanu Narayen said in the earnings release.

Digital Experience segment sales jumped 26% to $985 million. Digital Media segment revenue was up 23% year over year to $2.87 billion. That includes Creative segment revenue of $2.37 billion, up 21% compared with the year-ago quarter, and Document Cloud revenue of $493 million, up 31% year over year.

For the fiscal fourth quarter, the company’s targets include revenue of $4.07 billion and non-GAAP earnings of $3.18 per share. Both figures were ahead of Wall Street’s consensus estimate prior to the release, according to FactSet.

Write to Connor Smith at connor.smith@barrons.com