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Local Tech Wire

RALEIGH, N.C. – Boosted by a 21 percent increase in subscription revenue, beat Wall Street expectations for revenues and profits in its fourth quarter

Quarterly billings set a record, according to Chief Executive Officer Jim Whitehurst.. Despite the global recession, Red Hat also added 350 employees over the past year, the company noted.

The world’s leading developer of open source Linux software and related solutions reported after the markets closed Monday a profit of 19 cents per share, or over $35 million, after one-time expenses and items were excluded.

Analysts had projected a 16-cent profit.

Red Hat shares closed at $30.70 Wednesday, up 53 cents, but fell slightly after the earnings report.

Quarterly revenues, meanwhile, climbed 18 percent from a year ago to $195.9 million. Analysts polled by Thomson First Call had expected revenues to be $193 million.

Leading the income surge was subscription revenue, up 21 percent from the fourth quarter of the previous fiscal year.

Full-year revenue climbed 15 percent from Red Hat’s last fiscal year to $748.2 million. Subscription revenue grew to $638.7 million, an 18 percent jump.

“With double digit revenue growth and record billings, our fourth quarter capped off a year of solid performance, moving us closer to our milestone revenue goal of a billion dollars,” Whitehurst said in a statement.

“As we look forward, we believe that we are well positioned at the confluence of several major technology trends in the data center, including cloud computing, virtualization and middleware,” he added. “Red Hat’s products directly address these trends and deliver innovative, cost-saving solutions to our customers that we expect will continue to drive our growth.”

For the year, Red Hat said profits totaled $87.3 million, or 45 cents per share, minus one-time expenses. Profits a year earlier were $78.7 million.

“This year has been about consistent execution in the most difficult economic conditions in our lifetime,” said Chief Financial Officer Charlie Peters. “We managed costs carefully while continuing to invest significantly. We added over 350 employees consistently throughout the year, principally in engineering and sales. We invested in sales training, systems and new equipment while holding the line on travel and other discretionary costs.”

As of Feb. 28, which marked the end of the fiscal year, Red Hat reported cash and investments of $970.2 million. Its deferred revenues totaled $649.9 million, up 19 percent from a year earlier.

After the earnings release, Red Hat announced a $300 million stock buyback plan. It completed a $250 million buyback plan earlier this month with $10 million in purchases.