Red Hat Q4 Profit Up, Shares Gain - Update

(RTTNews) - Linux software maker Red Hat Inc (RHT), on Wednesday reported an increase in profit for the fourth quarter as revenues grew 16 percent, with both earnings and revenue topping Wall Street estimates.

Shares of Red Hat gained about 4 percent on the NYSE.

Raleigh, North Carolina-based Red Hat's fourth-quarter profit rose to $47.7 million or $0.26 per share from $45.1 million or $0.24 per share last year.

Excluding special items, adjusted earnings for the quarter were $80.6 million or $0.43 per share, up from $75.2 million or $0.39 per share a year ago. On average, 30 analysts polled by Thomson Reuters estimated earnings of $0.41 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the fourth quarter grew 16 percent to $463.9 million from $400.4 million last year. Analysts had a consensus revenue estimate of $456.5 million for the quarter.

"Red Hat delivered strong fourth quarter results that were highlighted by subscription revenue and total revenue that both grew over 20% year-over-year on a constant currency basis. We continued to experience strong demand for our open, hybrid cloud technologies, as evidenced by increased cross-selling in our top 30 deals which were all over $2 million for the first time," said CEO Jim Whitehurst.

Adjusted gross margin for the quarter was flat at 86.2 percent, while adjusted operating margin dropped to 23.8 percent from 24.3 percent last year.

Red Hat has also authorized a new stock repurchase program to buy back up to $500 million of its common stock, which replaces the previous $300 million buyback plan scheduled to expire on March 31.

RHT closed Wednesday's trading at $68.45, down $0.95 or 1.37%, on the NYSE. The stock, however, gained $2.65 or 3.87% in the after-hours trade.