Red Hat 1Q Earnings Beat Analysts’ Views

While Red Hat’s shares may never be high enough to truly make investors happy, at least they were higher than expected this time around.

RALEIGH, N.C. - Red Hat Inc., the leading distributor of Linux software, on Thursday reported first-quarter earnings that beat Wall Street projections as sales increased 46 percent from last year.

The Raleigh-based company said it earned $12.4 million, or 7 cents per share, up from $11.8 million, or 6 cents per share, last year. Revenue rose to $60.8 million from $41.8 million during the year-ago period.

On average, analysts surveyed by Thomson Financial expected earnings of 5 cents per share on revenue of $61.3 million.

“These numbers were slightly higher than we were expecting … these guys are continuing to dominate,” said Katherine Egbert, an analyst with Jefferies & Co. “The only negative I see is that their operating margin was down — at 16.1 percent.”

Chief Financial Officer Charlie Peters said the company is satisfied with the operating margin for now, partly because of the amount of international business the company does. [Read the rest]