Shantanu Narayen, Adobe Systems
Kim Krish | Corbis | Getty Images
Adobe shares fell about 10% on Wednesday after software companies lowered their fiscal year estimates to explain the impact of the suspension in Russia.
Adobe announced on March 4th, the first day of the quarter, that it will stop new sales in Russia and Belarus after Russia invades Ukraine. Adobe announced in its first-quarter earnings report after closing Tuesday that the region’s recession would reduce its 2022 annual recurring revenue forecast by $ 75 million.
Adobe will continue to sell its products in Ukraine, reducing the expected digital media ARR by an additional $ 12 million, for a total reduction of $ 87 million. The company forecasts revenue of $ 4.34 billion in the fiscal year.
Analysts at companies such as Deutsche Bank and Piper Sandler have lowered their stock price targets in response to Adobe’s updated figures. German analysts have adjusted the price target from $ 660 to $ 575, and Piper Sandler has adjusted it from $ 600 to $ 545.
This is the second time Adobe has experienced a double-digit decline in the last three months. In December, stock prices plummeted after the company fell short of first-quarter expectations. Shares fell about 39% from their November highs to $ 420.31 at noon on Wednesday.
Despite that forecast, Adobe reported higher-than-expected quarterly earnings.