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]