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Adobe anticipates negative second-quarter revenue

An Adobe Systems Inc software box is shown in Los Angeles, California, U.S., March 13, 2017.

March 14 (mod1s) - Adobe (ADBE.O), opens new tab predicted second-quarter revenue below analysts' projections on Thursday citing fierce competition and lackluster demand for its artificial intelligence-integrated photography, illustration and video applications amid a challenging economy. 

The company's shares plunged more than 10% after the bell. 

Companies and people have turned attention to lowering expenses amid rising interest rates and a challenging economy, limiting growth at the Photoshop software producer that has been investing in AI technologies to entice more customers.

Adobe has implemented AI technologies into its goods such as document reader Acrobat, Photoshop and Premiere Pro. The business claimed last month it has released a new AI helper for Reader and Acrobat. 

The firm also faces competition from companies such as Stability AI and Midjourney, which provide AI services comparable to Adobe such as producing graphics using text instructions. 

Adobe anticipated second-quarter sales between $5.25 billion and $5.30 billion, below analysts' projections of $5.31 billion, according to LSEG data.

For the first quarter, the company's sales grew more than 11% to $5.18 billion, exceeding projections of $5.14 billion. 

Adobe also unveiled a new $25 billion stock buyback program on Thursday. 

On an adjusted basis, the business predicted second-quarter earnings per share between $4.35 and $4.40, the midpoint of which was in line with forecasts. 

Adobe had halted its $20-billion bid for cloud-based designer platform Figma in December after facing multiple regulatory barriers.

Adobe's first-quarter operating expenditures, which included a termination fee of $1 billion linked to the Figma purchase, grew to nearly $3.69 billion.


Source: https://www.reuters.com/

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