Adobe slumps 11% as the software maker says halting sales in Russia will reduce yearly revenue

• Adobe shares dropped 11% on Wednesday following the software maker's revenue warning for fiscal 2022.
• Adobe sees yearly revenue declining by $75 million after halting sales in Russia and Belarus. 
• The company continues to provide digital media services in Ukraine. 

Adobe stock sharply dropped Wednesday after the maker of Photoshop and other creativity software products said its revenue will take a hit from suspending sales in Russia, a move it made after Moscow launched a war against Ukraine. 

Shares of Adobe fell as much as 11% to $416.47, before paring the intraday slump to 9.4%. The stock in 2022 through Tuesday's regular session had lost about 18%, with large-cap tech stocks overall on the Nasdaq Composite this year driven into a bear market. 

Revenue in fiscal 2022 will likely be reduced by $75 million, the company said late Tuesday in its fiscal first quarter report. Adobe in early March said Russia's attack on Ukraine prompted it to immediately halt new sales of its products and services in Russia and Belarus. It also terminated access to its Creative Cloud, Document Cloud, and Experience Cloud products to Russian government-controlled media outlets.

Adobe is still providing digital media services in Ukraine but projected a $12 million cut there in digital media annualized recurring revenue. 

"International events and broader uncertainty created a murky picture for FY22, particularly exiting Russia and Belarus," Goldman Sachs analyst Kash Rangan said in a research note dated late Tuesday. "While we acknowledge the implications of the Ukraine/Russia conflict … we note these changes are less operational changes and demand remains strong across various market segments." 

Goldman cut its price target to $605 from $710 given Adobe's recent market performance. It said Adobe still appears on track to double revenue in the long-term, potentially leading the company to enter the top ranks of software makers and reach at least $40 billion in revenues. 

For its fiscal first quarter, Adobe posted adjusted earnings of $3.37 a share, 3 cents ahead of a FactSet consensus forecast. Revenue rose to $4.26 billion, slightly ahead of expectations of $4.24 billion.