Red Hat Earnings: Revenue and Net Income Growth Just Not Enough for Investors

S&P 500 (NYSE:SPY) component Red Hat Inc. (NYSE:RHT) reported net income above Wall Street’s expectations for the first quarter. Red Hat is engaged in providing open source software solutions. They are known for their version of Linux, Red Hat Enterprise Linux.

Investing Insights: Is TV the Next Bullish Catalyst for Apple’s Stock?

Red Hat Inc. Earnings Cheat Sheet

Results: Net income for Red Hat Inc. rose to $37.5 million (19 cents per share) vs. $32.5 million (17 cents per share) in the same quarter a year earlier. This marks a rise of 15.4% from the year-earlier quarter.

Revenue: Rose 18.9% to $314.7 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Red Hat Inc. reported adjusted net income of 30 cents per share. By that measure, the company beat the mean estimate of 19 cents per share. Analysts were expecting revenue of $310.8 million.

Quoting Management: “Our first quarter results represented a strong start to our fiscal 2013. Red Hat’s compelling value proposition and innovative, open source technologies continued to drive our financial success and market share gains.” stated Jim Whitehurst, President and Chief Executive Officer of Red Hat.

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 23.6%, with the biggest boost coming in the second quarter of the last fiscal year when revenue rose 28% from the year earlier quarter.

The company has now seen its net income rise for three quarters in a row. In the fourth quarter of the last fiscal year, net income rose 7.3% and in the third quarter of the last fiscal year, the figure rose 47%.

The company beat estimates last quarter after being in line with expectations in the fourth quarter of the last fiscal year with net income of 20 cents per share.

Looking Forward: The average estimate for the second quarter remains unchanged at 21 cents a share. The average estimate for the fiscal year is 88 cents per share, a rise from 86 cents ninety days ago.

Competitors to Watch: Oracle Corporation, CA, Inc., BMC Software, Inc., Novell, Inc., Microsoft Corporation, Intl. Business Machines Corp., EMC Corporation, Hewlett-Packard Company, VMware, Inc., and Symantec Corporation.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

Don’t Miss These Additional Hot Stories:

Will Europe Provide the Final Catalyst for Gold and Silver?

Are Ford Motor and Coca-Cola Friending Facebook for the Long-Term?

Is Apple Fearful of Microsoft’s New Tablet?