Red Hat Inc. Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Red Hat, Inc. (NYSE:RHT) will unveil its latest earnings on Monday, December 19, 2011. Red Hat is engaged in providing open source software solutions. They are known for their version of Linux, Red Hat Enterprise Linux.

Red Hat, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 19 cents per share, a rise of 26.7% from the company’s actual earnings for the same quarter a year ago. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. Analysts are projecting profit to rise by 30% versus last year to 78 cents.

Past Earnings Performance: The company’s quarterly results have come in above estimates for the last three quarters. Last quarter, the company booked net income of 22 cents per share versus a mean estimate of profit of 19 cents per share.

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Wall St. Revenue Expectations: On average, analysts predict $289.5 million in revenue this quarter, a rise of 22.9% from the year ago quarter. Analysts are forecasting total revenue of $1.13 billion for the year, a rise of 24.3% from last year’s revenue of $909.3 million.

Analyst Ratings: Analysts are bullish on this stock with 16 analysts rating it as a buy, two rating it as a sell and four rating it as a hold.

A Look Back: In the second quarter, profit rose 69% to $40 million (20 cents a share) from $23.7 million (12 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 28% to $281.3 million from $219.8 million.

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past four quarters. Over that span, the company has averaged growth of 25.2%, with the biggest boost coming in the most recent quarter when revenue rose 28% from the year earlier quarter.

The company has seen net income rise in three straight quarters. Net income rose 34.8% in the first quarter and 43.4% in the fourth quarter of the last fiscal year.

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 Price Performance: During September 19, 2011 to December 13, 2011, the stock price had risen $6.04 (14.8%) from $40.94 to $46.98. The stock price saw one of its best stretches over the last year between October 4, 2011 and October 14, 2011 when shares rose for nine-straight days, rising 18.9% (+$7.55) over that span. It saw one of its worst periods between November 15, 2011 and November 25, 2011 when shares fell for eight-straight days, falling 14.8% (-$7.79) over that span. Shares are up $1.33 (+2.9%) year to date.

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

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