Red Hat 3Q profit falls 32 pct on higher expenses

AP News
|
Posted: Dec 22, 2009 6:24 PM

Red Hat Inc. said Tuesday that its third-quarter net income fell by 32 percent as the company grappled with higher expenses that included a legal settlement. But results still exceeded Wall Street's forecasts.

Shares of Red Hat rose $1.97, or 6.6 percent, to $31.84 in after-hours trading.

The provider of Linux operating systems software earned $16.4 million, or 8 cents per share, compared with $24.3 million, or 12 cents, in the same quarter a year ago. The just-concluded quarter included an $8.8 million charge to settle a lawsuit, which shaved 3 cents per share from earnings. Red Hat also booked higher operating expenses.

Excluding one-time items, Red Hat said profit would have been $33.5 million, or 17 cents per share, compared with $36.9 million, or 18 cents, a year ago.

Revenue was up 18 percent to $194.3 million from $165.3 million.

Red Hat's third-quarter adjusted results exceeded the 16 cents per share in earnings expected by analysts polled by Thomson Reuters, which typically exclude one-time items. They expected revenue of $188.3 million.

At the end of November, deferred revenue came to $618.7 million, up 23 percent from a year ago at the Raleigh, N.C.-based company.