Red Hat Inc.'s (RHT) fiscal second-quarter profit jumped 37% as
the company again posted slightly better-than-expected results on
growing revenue and higher margins.
Shares were up 3.1%, to $25.66 in after-hours trading. At the
close, the stock was up 88% this year.
The open-software developer's results have held up relatively
well in recent quarters, as the bulk of its revenue is recurring
and subscription based. Goldman Sachs said earlier this month it
expected the upcoming server cycle to be healthy, due to improved
information technology spending and pent-up demand.
For the quarter ended Aug. 31, Red Hat reported earnings of
$28.9 million, or 15 cents a share, up from $21.1 million, or 10
cents a share, a year earlier. The company repurchased $47 million
of common stock in the quarter. Excluding stock compensation and
amortization expenses as well as a tax benefit in the latest
quarter, earnings rose to 16 cents from 14 cents.
Revenue improved 12%, to $183.6 million, as subscription revenue
increased 15%. Nearly half of the company's revenue is from outside
the U.S.
Analysts polled by Thomson Reuters expected per-share earnings
of 15 cents on revenue of $179 million.
Gross margin climbed to 84.5% from 83.3%.
Red Hat, which develops and provides open-source software and
services, focuses on getting customers to use free software
products such as the Linux operating system - a competitor to
Microsoft Corp.'s (MSFT) Windows. In July, Red Hat replaced CIT
Group Inc. (CIT) in the S&P 500-stock index.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com