Red Hat Shares Sink on 3Q Results
Shares of Red Hat Inc. (NYSE:RHT) plunged after the bell, as the company posted third-quarter earnings-per-share that beat estimates but revenue was just slightly higher-than-expected.
The open-source software maker said net income for the quarter increased to $38.2 million, or 19 cents a share, compared with $26 million, or 13 cents a share, in the year ago quarter. On an adjusted basis, earnings per share increased to 28 cents, compared to 20 cents in the third quarter of last year.
Revenue rose to $290 million, up from $235.6 million one year ago, as operating margin widened to 18.5% from 16.1%.
The results edged out expectations as analysts polled by Thomson Reuters had predicted earnings of 26 cents a share on revenue of $289.62 million.
The company credited steady demand from enterprise customers and increased market demand and market share for its strong quarterly revenue growth of 23%.
“We also recently completed the acquisition and integration of Gluster, including the launch of our first Red Hat branded storage product for unstructured data,” said Jim Whitehurst, President and Chief Executive Officer of Red Hat, in a statement. “We will continue to expand our storage solutions in cloud computing and big data storage, and believe that Red Hat is well positioned to deliver disruptive solutions in the large and growing storage market."
Still, shares of Red Hat fell in trading after hours, as the company’s revenue numbers narrowly edged out expectations. Red Hat shares fell $1.59 or 3.34% in Monday’s regular session to close at $46.05; the stock was down another $4.35 or 9.45% in electronic trading after the market closed.