Red Hat shares on track to open at highest since 2000 after strong Q1 results
BUZ INVESTORS Red Hat shares on track Red Hat Inc. RHT, +10.05% shares jumped more than 9% in after-hours trading Tuesday following a quarterly earnings report that beat expectations and raised projections for the year, sending prices to levels unseen since the dot-com boom went bust. The open-source tech-infrastructure company reported net income of $73.2 million, or 40 cents a share, on sales of $676.8 million for the first quarter of its 2018 fiscal year. After adjustments for stock-based compensation and other effects, Red Hat claimed profit of 56 cents a share. Analysts on average expected Red Hat to report adjusted earnings of 53 cents a share on sales of $648 million, according to FactSet, and the company had guided for adjusted profit of 52 cents to 53 cents a share. Red Hat also increased its guidance for profit and revenue for the full fiscal year; adjusted earnings are now expected to fall in a range of $2.66 to $2.70 a share,
Red Hat shares on track
Subscription revenue accounted for 88% of overall revenues and $458M of subscriptions came from Infrastructure-related offerings, a 14% growth on the year. Application Development-related and other emerging technologies accounted for the other $139M, a 41% growth.
FY18 guidance: revenue between $2.785B and $2.875B, above the $2.75B consensus, and $2.66 to $2.70 EPS with the low end coming in $0.03 above consensus. Operating margin expected at 23.6% and OCF between $850M and $870M.