WR Hambrecht downgraded Red Hat Inc. (RHAT) to neutral from buy.
Analyst Prakesh Patel says while net income of breakeven was in line with his estimate, revenue of $25.6 million came in below his $27 million estimate. Patel says on a conference call, CFO Kevin Thompson could not reiterate previous guidance of $0.10 fiscal 2002 (Feb.) EPS, and indicated that a near-term lack of visibility is causing the company to offer no guidance into future results. Patel believes this signals a significant uncertainty in Red Hat's ability to either capture revenue
growth or deliver continued profitablity.
He cut the $0.08 fiscal 2002 EPS estimate to breakeven, and cut the $0.16 fiscal 2003 to $0.01.