Red Hat Profit up 12%; New CEO Named
Red Hat said Thursday that its third quarter profit rose 12 percent as a surge in subscriptions helped the open-source software company offset increased spending on marketing and research.
Red Hat shares gained 1.76 percent in after-hours trade following the earnings announcement. During regular market hours, the stock rose 53 cents, or $2.90, to close at $18.79 per share on the New York Stock Exchange.
The Raleigh-based company said its net income in the quarter ending Nov. 30 was $20.3 million, or 10 cents per share, compared with $14.6 million, or 7 cents per share, in the year-ago period. Revenue rose 28 percent to $135.4 million.
Analysts expected the company to post earnings of 10 cents per share on revenue of $132.4 million, according to a Thomson Financial survey.
Red Hat also announced that James Whitehurst, the former chief operating officer of Delta Air Lines will take over as CEO of the company at the beginning of January. Long-standing chief Matthew Szulik will continue to serve as chairman of the company's board of directors, Red Hat said.
The company's core business -- subscription revenue -- was up 30 percent in the third quarter compared to last year. But operating expenses, including research and development and marketing, rose 27 percent.