Red Hat met analysts estimates on per share earnings for the third quarter but was slightly below expectations for revenues in its quarterly report issued Wednesday just after the markets closed.

Red Hat (Nasdaq: RHAT) reported earnings of 6 cents per share on total revenues of $50.9 million. The earnings were 4 cents after taxes for the quarter ending Nov. 30.

However, analysts raised questions about Red Hat’s future revenue sales. The stock fell more than $2 in trading Thursday, closing at $13.03.

Caris & Co. also cut its rating on Red Hat to “hold” from “above average”.

Analysts had predicted 6 cents per share earnings on revenues of $51.79 million.

“We are pleased with our progress and continued growth. We are focusing on those things that bring value to our customers globally, and that make it easier for them to do business with us. We believe that our results reflect continued improvements and validation of our subscription model,” said Charlie Peters, executive vice president and chief financial officer of red Hat, in a statement

Net earnings were $11.3 million, or $10.8 million after taxes, compared to $11.2 from the second quarter. Red Hat said it recognized a tax benefit of $600,000 in the second quarter.

Red Hat stock traded down 4 cents, at $15.09, on the day.

Revenues did increase 10 percent from $46.3 million from the second quarter even though the company said it increased its workforce 10 percent as part of an international expansion effort. Revenues beat figures for the same period in fiscal 2004 by 55 percent.

Subscription revenues were the main driver for Red Hat, climbing to $39.2 million, up 12 percent from the second quarter.

The company reported cash and equivalents on hand of $979 million.

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