Red Hat beats Street on revenues, earnings – on target for first $1B year

The world’s top Linux open source software developer and services provider reports revenues of $265 million and a profit of 24 cents per share for the first quarter of its new fiscal year. Stock jumps 3 percent on news.

Red Hat (NYSE: RHT) shares are surging in after-hours trading following its quarterly financial update when has the Raleigh-based company en route to its first $1 billion year. Red Hat launched in 1993.

The world’s top Linux software development and services firm reported revenues of $265 million and earnings of $47 million, or 24 cents per share, after one-time adjustments and expenses.

Analysts were expecting $253.6 million in revenues and profits of 16 cents per share.

Red Hat shares traded up slightly Wednesday at $43.76 as the markets closed but jumped 3 percent or 41.40 to 445.15 minutes after the earnings news.

The March-May quarter launched Red Hat’s fiscal year 2012, and Chief Financial officer Charlie peters has forecast revenues at between $1.05-1.07 billion.

CEO hails the news

“Red Hat has begun fiscal year 2012 with a strong first quarter including year-over-year billings growth of 28 percent that contributed to revenue and profitability that exceeded the high-end of our expectations,” said Jim Whitehurst, Red Hat’s chief executive officer. “We believe there is a fundamental shift in IT spending, in which cloud computing and virtualization have become key strategic priorities. We believe that Red Hat is well positioned to capitalize on this growing demand as enterprise customers look to Red Hat when upgrading and modernizing their IT infrastructure.”

(Whitehurst: Red Hat to triple sales in five years. Read details here.)

Subscriptions to Red Hat services led the revenue increase, up 26 percent from a year ago to $225.5 million.

“Strong sales execution, focused spending and good collections drove 49 percent growth in operating cash flow year-over-year,” Peters said. “Red Hat grew first quarter non-GAAP [generally accepted accounting principles] operating income by 28 percent year-over-year even as we ramped up marketing spending for the Red Hat Summit and product launches, and continued investments in R&D to enable further broadening of our product portfolio. We introduced innovative new cloud technologies such as OpenShift, our PaaS [platform as a service] offering, and CloudForms [for cloud computing], our IaaS [infrastructure as a service] offering. In addition, we enhanced our core products, including the release of Red Hat Enterprise Linux 6.1 and strengthened our partnerships with the launch of Open Virtualization Alliance.”

Last quarter, Red Hat beat Street expectations with revenues of $244.8 million and earnings of $51.4 million, or 26 cents per share. That was 4 cents better than analysts had predicted.

The previous quarter, the Hatters’ revenues hit $235.6 million with earnings of $39.1 million or 20 cents per share.

For the earnings report, read here.

Analysts and future trades had high expectations prior to Wednesday’s earnings report. Read more here.

“Cloud” announcement coming Thursday

Red Hat may have more significant news to announce on Thursday when the company hosts a webcast at 1 p.m. EST.

The company said it will make executives available to “provide a cloud computing technology update.”

The webcast can we watched at this link.

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