Red Hat Inc. Earnings Cheat Sheet: Exceeds Forecasts with Boost of Profit Rise

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

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Red Hat Earnings Cheat Sheet for the Third Quarter

Results: Net income for Red Hat Inc. rose to $38.2 million (19 cents per share) vs. $26 million (13 cents per share) in the same quarter a year earlier. This marks a rise of 46.8% from the year earlier quarter.

Revenue: Rose 23.1% to $290 million from the year earlier quarter.

Actual vs. Wall St. Expectations: RHT reported adjusted net income of 28 cents per share. By that measure, the company beat the mean estimate of 26 cents per share.

Quoting Management: “Red Hat continues to benefit from enterprise customers that are seeking to leverage their IT infrastructure to drive significant productivity gains and agility across their organizations. The combination of strong sales execution, market demand and market share gains contributed to organic billings and revenue growth of 23% for the quarter,” stated Jim Whitehurst, President and Chief Executive Officer of Red Hat. “We also recently completed the acquisition and integration of Gluster, including the launch of our first Red Hat branded storage product for unstructured data. We will continue to expand our storage solutions in cloud computing and big data storage, and believe that Red Hat is well positioned to deliver disruptive solutions in the large and growing storage market.”

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 24.8%, with the biggest boost coming in the second quarter when revenue rose 28% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 69% and in the first quarter, the figure rose 34.8%.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 3 cents in the second quarter, by 2 cents in the first quarter, and by 3 cents in the fourth quarter of the last fiscal year.

Looking Forward: The average estimate for the fourth quarter remains unchanged at 19 cents a share. The average estimate for the fiscal year is 78 cents per share, a rise from 75 cents ninety days ago.

Competitors to Watch: Oracle Corporation (NASDAQ:ORCL), CA, Inc. (NASDAQ:CA), BMC Software, Inc. (NASDAQ:BMC), Novell, Inc. (NASDAQ:NOVL), Microsoft Corporation (NASDAQ:MSFT), Intl. Business Machines Corp. (NYSE:IBM), EMC Corporation (NYSE:EMC), Hewlett-Packard Company (NYSE:HPQ), VMware, Inc. (NYSE:VMW), and Symantec Corporation (NASDAQ:SYMC).

Stock Performance: Shares of RHT were down 3.4% from the previous close.

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