Red Hat beat Wall Street expectations for quarterly revenues and met projections for profits in its fiscal second quarter.
After the markets closed Tuesday, Red Hat (NYSE: RHT) said sales ending June 30 jumped 28 percent from a year ago to $127.3 million. Driving the surge were subscription revenues of $109.2 million, a 29 percent increase.
However, analysts remain mixed about Red Hat.
Earlier Tuesday, RBC Capital Markets initiated coverage of Red Hat with a “market perform” rating and set a $22 target for Red Hat shares. On Monday, credit Suisse downgraded the stock to “neutral” from “outperform.”
Analysts at Robert W. Baird set a target price of $28 for Red Hat and reiterated its “outperform” rating on Wednesday morning.
Matrix Research remained skeptical, though. It maintained a “sell” rating.
Analysts polled by Thomson Financial had projected sales of $125 million.
Excluding one-time expenses, the Linux software developer’s profits of 17 cents per share met analysts’ expectations.
Including charges, Red Hat made $18.2 million, or 9 cents per share. That’s up from $11 million, or 5 cents per share a year ago.
Revenues and profits also increased from the previous quarter by 6 percent overall and a penny a share.
“Over all, we believe the demand for our solutions continues to be strong around the world,” Matthew Szulik, Red Hat’s chairman and chief executive, said during a conference call. “I believe that we are going to continue to look for ways to forge partnerships.”
He said the company would continue to offer customers products that provide “agility at the lowest cost.”
“Customers don’t want to be locked into proprietary solutions. We’ve had 30 years of that nuisance,” he said.
Red Hat shares closed down 21 cents at $18.79 in trading Tuesday. They jumped 24 cents in after-hours trading.