Shares of Adobe fell about 10% on Wednesday after the software company lowered its estimate for fiscal year to take into account the effects of the cessation of sales in Russia.
On March 4, the first day of the quarter, Adobe announced that it would stop new sales in Russia and Belarus after Russia’s invasion of Ukraine. In its first-quarter earnings report after closing Tuesday, Adobe said it was lowering its forecast of annual recurring revenue by $ 75 million for fiscal year 2022 due to the downturn in the region.
While Adobe will continue to sell products in Ukraine, it has reduced expected digital media revenue by an additional $ 12 million, resulting in an overall reduction of $ 87 million. The company forecasts revenue of $ 4.34 billion for the fiscal year.
Analysts from companies including Deutsche Bank and Piper Sandler have lowered stock price targets in response to updated Adobe figures. Deutsche analysts adjusted the target price to $ 575 from $ 660, and Piper Sandler to $ 545 from $ 600.
This is the second time in the last three months that Adobe has suffered a double-digit drop. In December, shares fell after the company presented a forecast for the first quarter, which deviated from estimates. Shares fell about 39% from their all-time high in November to $ 420.31 as of mid-Wednesday.
Despite the forecast, Adobe reported better-than-expected quarterly revenue for the quarter.