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Call to the Floor: Red Hat

Red Hat, a leader in open source systems, servers and software, beat Street earnings estimates earlier in the week, but the stock took a nose dive largely due to what the company said about billings.

By the numbers, Red Hat said late Wednesday that it expects adjusted earnings of 28 cents to 29 cents per share for the current quarter, on revenue of $320 million to $322 million.

Analysts, on average, were expecting earnings of 29 cents per share on revenue of $331 million.

However, as we said above, the catalyst for the decline was billings. Many analysts expected a bigger increase in bookings than the 16 percent rise the company reported for its fiscal first quarter.

Citi Investment Research analyst Walter Pritchard said the market expected billings to rise 18 percent to 19 percent. He had forecast an even bigger 22 percent increase.

Was the decline justified or is the stock oversold?

Don’t make a move until you check out our exclusive interview with Red Hat CEO James Whitehurst. Watch the video now!




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Trader disclosure: On June 21, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long AGU; Guy Adami is long MSFT; Guy Adami is long NUE; Guy Adami is long BTU; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long MSFT; Karen Finerman is long M; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDY; Tim Seymour is long BAC; Tim Seymour is long INTC; Tim Seymour is long SBUX

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