Linux distributor Red Hat raises full-year profit forecast
Posted: Mon Jan 19, 2015 11:15 amRed Hat, the world's largest commercial distributor of the Linux operating system, raised its profit forecast for the full year after reporting quarterly revenue and profit above market expectations, boosted by strong growth in subscriptions.
The company's chief financial officer, Charles Peters, said he would retire in the next 12 months.
Shares of Red Hat, which counts IBM, Dell and Alcatel-Lucent SA among its customers, were up 10.6% in extended trading.
Red Hat — which is benefiting from higher enterprise demand for its software used in data-centers, for cloud computing and to create virtual computers within an operating system — said it renewed its top 25 deals.
"There is some exciting new opportunities like OpenStack that I think they want to be participating in," UBS Equities analyst Tim Klasell said.
OpenStack is a free open-source cloud computing software platform.
"I think they want to be one of the key vendors to the new large data centers," Klasell added.
Red Hat is benefiting from higher enterprise demand for its software used in data-centers, for cloud computing and to create virtual computers within an operating system.
The company said it now expects an adjusted profit of $1.57-$1.58 per share for the full year, up from its previous forecast of $1.53-$1.55.
Analysts on average were expecting $1.55 per share, according to Thomson Reuters.
For the fourth quarter, the company forecast an adjusted profit of 40-41 cents per share on revenue of $456 million-$459 million.
Analysts were expecting a profit of 41 cents on revenue of $459.2 million.
New products helped billings proxy — an important metric for investors — grow by 19% in the third quarter, Klasell said. Red Hat defines billing proxy as its total revenue combined with the change in deferred revenue.
Total revenue rose to $455.9 million from $396.5 million. Revenue from subscriptions, Red Hat's biggest revenue source, rose 15.1% to $394.7 million.
The company's net income, however, fell to $47.9 million, or 26 cents per share, from $52.0 million, or 27 cents per share, a year earlier.
Excluding items, Red Hat earned 42 cents per share.
Analysts expected a profit of 40 cents per share on revenue of $451.2 million.
Up to Thursday's close of $61.50, the stock has gained about 10% this year.
The company's chief financial officer, Charles Peters, said he would retire in the next 12 months.
Shares of Red Hat, which counts IBM, Dell and Alcatel-Lucent SA among its customers, were up 10.6% in extended trading.
Red Hat — which is benefiting from higher enterprise demand for its software used in data-centers, for cloud computing and to create virtual computers within an operating system — said it renewed its top 25 deals.
"There is some exciting new opportunities like OpenStack that I think they want to be participating in," UBS Equities analyst Tim Klasell said.
OpenStack is a free open-source cloud computing software platform.
"I think they want to be one of the key vendors to the new large data centers," Klasell added.
Red Hat is benefiting from higher enterprise demand for its software used in data-centers, for cloud computing and to create virtual computers within an operating system.
The company said it now expects an adjusted profit of $1.57-$1.58 per share for the full year, up from its previous forecast of $1.53-$1.55.
Analysts on average were expecting $1.55 per share, according to Thomson Reuters.
For the fourth quarter, the company forecast an adjusted profit of 40-41 cents per share on revenue of $456 million-$459 million.
Analysts were expecting a profit of 41 cents on revenue of $459.2 million.
New products helped billings proxy — an important metric for investors — grow by 19% in the third quarter, Klasell said. Red Hat defines billing proxy as its total revenue combined with the change in deferred revenue.
Total revenue rose to $455.9 million from $396.5 million. Revenue from subscriptions, Red Hat's biggest revenue source, rose 15.1% to $394.7 million.
The company's net income, however, fell to $47.9 million, or 26 cents per share, from $52.0 million, or 27 cents per share, a year earlier.
Excluding items, Red Hat earned 42 cents per share.
Analysts expected a profit of 40 cents per share on revenue of $451.2 million.
Up to Thursday's close of $61.50, the stock has gained about 10% this year.