Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of WRAL.com.

RESEARCH TRIANGLE PARK, N.C. – In financial lingo, “FX headwind” doesn’t stand for special effects in a movie involving a hurricane. It means “foreign exchange challenges” – and is dealing with that problem right now, according to a pair of financial analysts.

Red Hat (NYSE: RHT), the world’s top Linux software and services provider that’s based in Raleigh, reports earnings on June 22 and hosts its annual investor day on the 23. Will news be good? Mixed? Bad?

In a preview issued overnight Thursday, analysts Katherine Egbert and Ignatius Njoku at noted:

“FX could rob Q1 of some upside, and dampen forward expectations.

“Still, the FX headwinds are temporary and we see Red Hat benefiting over the next few quarters from increased server unit shipments [for Red Hat Enterprise Linux] and the move to larger, multi-core [chip processor] systems.”

The two have a “Buy” rating on Red Hat with a target price of $35. Jefferies’ Egbert has generally maintained a very positive attitude about Red Hat and periodically cites talk about a Red Hat buyout someday by IBM or a larger rival.

They also didn’t note the retirement of Chairman Matthew Szulik, a longtime Red Hat veteran who led the company public on the Nasdaq and then to the NYSE. They must be pretty confidence CEO Jim Whitehurst continues to provide a steady hand after taking over from Szulik as CEO two years ago.

Red Hat shares recently hit a 52-week high of $32.45.

The Hatters have driven their stock price back up from a 52-week low of $18.11 with consistently strong revenue and profit reports. On Tuesday, the Jefferies duo expect Red Hat to report $200 million in revenue and a profit of 18 cents per share. That revenue total’s slightly under Red Hat guidance of $202-$204 million, the analysts notes, but profits remain on target. Analysts’ consensus on revenues is $203 million and on profits is $18 cents, the add.

However, pushing down Jefferies’ revenue target is the “FX headwind” based on sharp declines in the euro. Since the euro is down “about 9 percent since mid-March,” they say, Red Hat revenue guidance also could decline. They note Red Hat generates around 25 percent of revenues in euros and around 15 percent in yen.

On the business side, they note that the “server upgrade cycle continues” in business IT, which means more Red Hat opportunities.

“Red Hat has done a nice job of capturing the upside from a rebound in low and mid-range server shipments,” they wrote.

The company also has shown “increased discipline on discounting should benefit RH this year and into next.”

Government sales have shown “soft softness,” they warned, but they also added that “spending in these sectors is often lumpy.”

What do they expect on analysts’ day?

“Inline with past investor events, we expect RH to take the covers off some new relationships, products and financial details,” they wrote. “We think it’s possible that they give more detail on revenue breakout by vertical and an upgrade on their cloud [computing] strategy.”

And what’s the big threat?

As usual, Larry Ellison and Oracle, who has never been reluctant to sling stones at the Hatters.

“Risks include Oracle’s entry into the enterprise operating system market, flattish margins, opaque revenue, and valuation that is based on difficult to predict cash flows,” the Jefferies duo said.

FX these days makes projections even more difficult.

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