Red Hat Results Top Estimates; Boosts Outlook

(RTTNews) - Red Hat, Inc. (RHT), the world's largest seller of Linux software, said Monday after the markets closed that its second quarter profit rose 10% from last year, as revenue increased 13%.

The company's quarterly earnings per share, excluding items, also came in above expectations as did its quarterly revenue.

At the same time, the company gave an upbeat outlook for the current quarter and raised its full year forecast.

"We exceeded guidance across a number of financial metrics. Our growth in revenue led to strong growth of non-GAAP operating income and non-GAAP EPS of 13% and 15%, respectively. We also continued to invest in our initiatives to deliver open, hybrid cloud solutions which support our long-term growth opportunities," said Frank Calderoni, Executive Vice President, Operations and Chief Financial Officer of Red Hat.

Red Hat shares are currently losing 0.99% in after hours trading after closing the day's regular trading session at $72.72, up $1.66 or 2.34%. The shares trade in a 52-week range of $52.53 to $81.49.

For the second quarter ended August 31, 2015, the Raleigh, North Carolina-based company reported net income of $51.4 million or $0.28 per share, compared to $46.8 million or $0.25 per share for the year-ago quarter.

Excluding items, adjusted net income for the second quarter was $87.8 million or $0.47 per share, compared to $78.5 million or $0.41 per share in the prior year quarter.

On average, 29 analysts polled by Thomson Reuters expected the company to earn $0.44 per share for the second quarter. Analysts' estimates typically exclude special items.

Total revenue for the second quarter rose 13% to $504.15 million from $445.90 million in the same quarter last year. Twenty-six analysts had a consensus revenue estimate of $494.55 million for the second quarter.

Subscription revenue for the quarter also increased 13% to $441.5 million.

The company ended the quarter with total deferred revenue balance of $1.41 billion, up 13% from a year earlier.

Looking forward to the third quarter, the company forecasts revenue of $519 million to $523 million and adjusted earnings of $0.47 per share. Analysts currently expect the company to earn $0.46 per share on revenue of $513.56 million for the third quarter.

For the fiscal year 2016, Red Hat now forecasts revenue of $2.034 billion to $2.044 billion and adjusted earnings of $1.85 to $1.87 per share. Previously, the company forecast revenue of $1.99 billion to $2.02 billion and adjusted earnings of $1.81 to $1.84 per share. Analysts currently expect the company to earn $1.83 per share on revenue of $2.02 billion for the fiscal year 2016.