Wednesday, September 5, 2012

Red Hat Drops 9%: FYQ3 Revenue Barely Beats

Software maker Red Hat (RHT) this afternoon reported fiscal Q3 revenue and earnings per share ahead of analysts’ expectations.

Revenue in the three months ended in November rose 23%, year over year, to $290 million, yielding earnings per share of 28 cents.

Analysts had been modeling $289.6 million and 26 cents per share.

Subscription revenue rose 24% to $246.5 million.

CFO Charlie Peters remarked, “We continued to deliver consistent performance across our business which resulted in strong growth in our key financial metrics. At the same time, we continued to invest in strategic growth initiatives.”

Red Hat management will hold a conference call with analysts at 5 pm, Eastern time, this afternoon, and you can catch the Webcast of it here.

Shares of Red Hat are down $4.08, or 9%, at $41.97 in late trading.

It’s conceivable that the very narrow top-line beat disappointed investors accustomed to a larger upside surprise. Red Hat beat estimates by 3% to 5% in each of the last six quarters, according to Thomson Reuters data.

: �Fund managers say, I�m the investor, give me that cash so I can choose how to invest it.� Sitting on Apple�s balance sheet, cash is offers minimal return in the form of fixed income, money-market and other investments.

We continued to deliver consistent performance across our business which resulted in strong growth in our key financial metrics. At the same time, we continued to invest in strategic growth initiatives.”

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