Red Hat 4Q Tops Street; Shares Up

By FOXBusiness

Shares of Red Hat Inc. (NYSE:RHT) ticked up more than 8% in trading after-hours as the open source software maker posted profit and revenue that easily topped expectations, and announced a $300 million buyback program.

Shares rallied 5% higher after the company announced results, and then edged up another 3% after the buyback program was announced. Beginning on April 1, the company's new stock repurchase program will replace its old program which expires March 31.  Red Hat has used $214 million under the current buyback program, to purchase 3% of its shares.

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For the fiscal fourth-quarter, profit rose to $36 million, or 18 cents a share, compared with year-ago net income of $33.5 million, or 17 cents a share, one year ago. On an adjusted basis, earnings per share rose to 29 cents, up from 26 cents in the fiscal fourth-quarter of last year, however the year-ago quarter saw a 2-cent benefit related to retroactive research tax credits.

Revenue rose 21% to $297 million, compared with last year’s revenue of $244.80 million.  Subscription revenue rose 22% to $255.2 million during the quarter, and operating cash flow increased 35% to $128 million.

The results easily beat expectations, as analysts had predicted earnings of 27 cents a share on revenue of $291.2 million, according to a Thomson Reuters analyst poll.

"Our investments to expand our geographic sales footprint and add sales people with targeted industry and product knowledge has accelerated our growth," said Jim Whitehurst, president and chief executive of Red Hat, in a release. "The open source technologies which we provide are being selected by more customers every day as they re-architect the infrastructure of their data centers for greater efficiency, agility and cloud enablement," he continued.

Shares of Red Hat fell 51 cents, or 1%, in Wednesday’s regular session, closing at $51.39 a share.  The stock was up $4.16, or 8.09%, in after-hours trading. Year-to-date, the stock is up 24%.

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