Red Hat Rises as Revenue, Earnings Beat Analysts’ Estimates

Red Hat Inc. (RHT) rose as much as 10 percent in extended trading after the largest seller of Linux software reported fiscal fourth-quarter revenue and per-share earnings that exceeded analysts’ predictions.

Sales rose 25 percent to $244.8 million in the three months that ended Feb. 28, compared with the $235.1 million average estimate of analysts surveyed by Bloomberg. Per-share earnings, excluding certain items, were 26 cents, beating the 22 cents projected by analysts.

Customers updating data centers to take advantage of cloud computing helped billings rise more than 30 percent, the fastest rate in 12 quarters, Chief Financial Officer Charlie Peters said in a statement. The company, based in Raleigh, North Carolina, may reach a billion dollars in revenue for the next fiscal year, the first open-source focused company to do so, Chief Executive Officer Jim Whitehurst said.

“People are renewing old infrastructure that they couldn’t afford to replace before,” Whitehurst said today in a telephone interview. “You did have a bit of pent-up need.”

The company has done a better job selling existing customers more products and making inroads in industries that haven’t been traditional strongholds for Linux such as oil and gas and retail, Whitehurst said. Red Hat also saw a big rebound in demand, especially in North America, as companies replaced aging systems after several years of trying to make do.

Fiscal Year Profit

Red Hat expects fiscal year profit, excluding some costs, of 94 cents to 96 cents, the company said. That compares with an average analyst estimate of 93 cents. Sales will be $1.05 billion to $1.07 billion, and analysts had expected $1.03 billion, on average.

For the first quarter, Red Hat expects profit of 21 cents to 22 cents on sales of $252 million to $255 million.

The stock rose as much as $4.17 to $44.14 at 4:42 p.m. New York time after earlier gaining 41 cents to $39.97 at 4 p.m. in New York Stock Exchange composite trading. Red Hat has declined 12 percent this year.

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Thomas Giles at tgiles5@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.