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Wednesday, September 23, 2009

Red Hat Sees Higher Profit, Revenue

By Kathryn Glass

FOXBusiness

Software company Red Hat Inc. (RHT), which distributes the Linux operating system, saw profit jump and revenue rise significantly in the second quarter, beating analyst expectations.

The company reported second-quarter net income jumped of 37% to $28.9 million, or 15 cents per share, which compares to profit of $21.1 million or 10 cents per share in the second quarter of 2008. Adjusted net income rose 31% to $39.4 million or 20 cents per share, compared to profit of $30.1 million or 14 cents per share for the year-ago period. Adjusted earnings per share easily beat analyst estimates which averaged 15 cents per share, according to Thomson Reuters.

Revenue also beat analyst expectations and grew by 12%, to $183.6 million, compared to $164.4 million reported during the second quarter last year. Analysts were expecting revenue of $179.1 million.

"IT organizations continue to move ahead with purchases of high value solutions, and Red Hat is capitalizing on this demand as a result of our strong customer relationships and proven value proposition,” said Jim Whitehurst, President and Chief Executive Officer of Red Hat. “These factors contributed to our better than expected total revenue in the second quarter, and drove annual subscription revenue growth of 15% for both the quarter and first half of fiscal year 2010.”

Whitehurst also said the company is positioned to perform well as the economy improves and businesses begin to ramp up IT spending.

Red Hat’s stock price rose 3.09%, or 77 cents in after-hours trading, to $25.65 per share.

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