Red Hat Declines as Profit Falls Short of Analyst Estimates
Red Hat Inc. (RHT), the largest seller of the open-source Linux operating system, dropped after second- quarter profit missed analysts’ estimates and the company pared sales forecasts on weak demand for services.
Excluding some items, profit in the quarter that ended Aug. 31 was 28 cents a share, less than the 29-cent average projection compiled by Bloomberg. Sales were $322.6 million, the company said yesterday in a statement, compared with the $321.7 million analysts estimated.
For the third quarter, profit will be 28 cents to 29 cents a share on sales of $336 million to $339 million, Red Hat said on a conference call. Analysts on average had predicted profit of 30 cents and sales of $339.7 million. For the fiscal year, Red Hat narrowed its revenue forecast to $1.32 billion to $1.33 billion, from the $1.32 billion to $1.34 billion projection the company gave in June.
Red Hat cited a slowdown in the services side of its business for the lower forecast. Demand for subscriptions to its software remains strong, Chief Executive Officer Jim Whitehurst said on the call.
Red Hat declined 4.3 percent to $55.08 at the close in New York. The stock has gained 33 percent this year.
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