Red Hat shares plunge after earnings report
Raleigh, N.C. — Red Hat stock plunged 13 percent after its earnings report and news that its chief financial officer is leaving. Red Hat needed to crush analyst estimates of its third quarter 2017 earnings, and while posting respectable numbers, did not do it.
The open source Linux company reported net income of $68 million or 38 cents a share on revenue of $615 million, all under analysts’ estimates.
Analysts expected sales of $619 million and 58 cents a share earnings.
Red Hat said that after adjustments for stock-based compensation and other items, it had earnings of 61 cents a share.
Red Hat’s stock slid 4 percent so far this year despite the company’s earnings topping analyst estimates for ten quarters.
Red Hat’s forecast for the fourth quarter and full year also came in under analyst expectations.
Red Hat forecast fourth-quarter ranges of $614 million-to-$622 million and Red Hat forecast fourth-quarter and full-year revenue ranges of $2.397 billion to $2.405 billion.
Analysts forecast $638 million for the fourth quarter and $2.42 billion for the full year.
Red Hat also announced that CFO Frank Calderoni notified Red Hat of his decision to step down as executive vice president, operations and Chief Financial Officer of Red Hat, effective in late January 2017, to enable him to accept a chief executive officer position at another company.
At an hour and a half after markets closed, Red Hat stock was down 12 percent to $70.21 after closing at $79.79.
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