Red Hat, Inc. (NYSE: RHT): Q1 Earnings Preview 2012

Red Hat, Inc. (NYSE: RHT) is scheduled to release its fiscal first-quarter earnings after the closing bell on Wednesday, June 22, 2011. Analysts, on average, expect the company to report earnings of 22 cents per share on revenue of $253.58 million. In the year ago quarter, the company reported earnings of 18 cents per share on revenue of $209.14 million.

Red Hat, Inc., together with its subsidiaries, provides open source software solutions to enterprises worldwide. The Company employs an open source software development and licensing model that uses the collaborative input of an international community of contributors to develop and enhance software.

In the preceding fiscal fourth-quarter, the Raleigh, North Carolina based company's net income was  $33.5 million, or 17 cents per share, compared to $23.4 million, or 12 cents per share, in the year-ago quarter. On an adjusted basis, the company earned 22 cents in the fourth quarter. Revenue rose 25% to $244.80 million from $195.87 million in the same quarter last year.Analysts, on average, expected the company to report earnings of 22 cents per share on revenue of $235.98 million.

For the fiscal first-quarter, Red Hat expects earnings of 21 to 22 cents per share, with revenue of $252 million to $255 million. The annual forecast is for earnings of 94 to 96 cents per share and revenue of $1.05 billion to $1.07 billion. 

Red Hat specializes in "open-source" software, which is technically free since its source code is distributed freely on the Internet, but which companies such as Red Hat are able to profit from by selling licenses that include support services. Red Hat offers open source software that is often used to deploy cloud computing solutions.

The company has benefited from growing adoption of "cloud computing" technologies. Cloud computing refers to services that are streamed over the Internet, instead of requiring software that's installed directly onto a desktop or laptop computer. According to CEO Jim Whitehurst, the company is on track to reach $1 billion in revenue in the fiscal year, helped by that trend.

Information technology spending is on the rise as companies spend more freely after clamping down during the Great Recession. But Japan's earthquake and tsunami have raised fears about companies such as Red Hat that do a large amount of business in that country. In regulatory filings, Red Hat has described Japan as the only country, besides the United States, that is individually material to its results. Still, Red Hat makes most of its money from U.S. customers.

Red Hat remains focused on managing discretionary costs effectively while increasing investments simultaneously in growth areas such as middleware, virtualization and cloud computing. 

Full Disclosure: None.

Red Hat, Inc. (NYSE: RHT): Q4 Earnings Preview

Red Hat, Inc. (NYSE: RHT) is scheduled to release its fourth-quarter earnings after the closing bell on Wednesday, March 23, 2011. Analysts, on average, expect the company to report earnings of 22 cents per share on revenue of $235.98 million. In the year ago quarter, the company reported earnings of 19 cents per share on revenue of $195.87 million.

Red Hat, Inc., together with its subsidiaries, provides open source software solutions to enterprises worldwide. The Company employs an open source software development and licensing model that uses the collaborative input of an international community of contributors to develop and enhance software.

In the preceding fiscal second-quarter, the Raleigh, North Carolina based company's net income was $26.02 million or $0.13 per share, compared to $16.41 million or $0.08 per share in the previous year. On an adjusted basis, net income for the quarter was $39.06 million or $0.20 per share, up from $33.52 million or $0.17 per share a year ago. Revenue rose 21% to $235.58 million from $194.35 million last year. Analysts, on average, expected the company to report earnings of $0.20 per share on revenue of $227.27 million.

At its last earnings call in December, the company raised its fiscal 2011 revenue guidance range to $898.0 million to $900.0 million versus its previous expectation of $877.0 million to $885.0 million. Non-GAAP EPS is expected to be in the range of 78 cents to 79 cents versus previous its expectation of 76 cents to 77 cents. Red Hat continues to expect operating cash flow for the fiscal year to range between $280.0 million and $290.0 million.

For the fourth quarter of 2011, Red Hat expects revenues in the range of $234.0 million to $236.0 million and non-GAAP EPS is projected in the range of 21 cents to 22 cents. 

Red Hat remains focused on managing discretionary costs effectively while increasing investments simultaneously in growth areas such as middleware, virtualization and cloud computing. 

Recently, JP Morgan analyst John Difucci lowered his rating on the stock to Underperform from Neutral, citing valuation. In a research note to clients, Difucci wrote “We believe it is risky to assume Red Hat will become a meaningful player in server virtualization at this time.” 

Full Disclosure: None.

Red Hat, Inc. (NYSE: RHT): Q3 Earnings Preview

Red Hat, Inc. (NYSE: RHT) is scheduled to release its third-quarter financial results after the market close on Tuesday, December 21, 2010. Analysts, on average, expect the company to report earnings of 20 cents per share on revenue of $227.27 million. In the year ago quarter, the company reported earnings of 17 cents per share on revenue of $194.35 million.

Red Hat, Inc., together with its subsidiaries, provides open source software solutions to enterprises worldwide. The Company employs an open source software development and licensing model that uses the collaborative input of an international community of contributors to develop and enhance software.

In the precedent fiscal second-quarter, the Raleigh, North Carolina based company's net income was $23.7 million, or 12 cents a share, compared to $28.9 million, or 15 cents a share, in the year-earlier quarter. On an adjusted basis, the company earned 19 cents per share in the latest quarter.  Revenue rose 20% to $219.8 million from $183.63 million. Analysts, on average, expected the company to report earnings of 14 cents per share on revenue of $211.49 million.

At its last earnings call in September, the company raised its revenue guidance for the full year from $835 million to $850 million to a tighter range of $877 million to $885 million. The company expects to grow non-GAAP operating income by 22% to 24% year-over-year, while continuing to invest in growth initiatives. The company expects non-GAAP EPS to be in the range of 76 cents to 77 cents per share. The company continues to expect operating cash flow for the full year between $280.0 million and $290.0 million.

For the third quarter, revenue is estimated to be approximately $226 million to $228 million. Operating margin is estimated to be between 24.5% to 25% and non-GAAP EPS for the third quarter is estimated to be $0.19 to $0.20 assuming the same 35% tax rate.

Red Hat remains focused on managing discretionary costs effectively while increasing investments simultaneously in growth areas such as middleware, virtualization and cloud computing. 

During the quarter in review, Red Hat acquired Makara, a developer of deployment and management solutions for applications in the cloud. Makara's technologies will accelerate the development of Red Hat's comprehensive Platform-as-a-Service (PaaS) solution as part of its Cloud Foundations portfolio.

Among other development, Red Hat announced a partnership with Eucalyptus Systems, creators of the Eucalyptus private cloud platform, to offer cross-cloud compatibility and expanded platform choice in the cloud. The two companies are working together to provide Eucalyptus support for Red Hat Enterprise Virtualization and Eucalyptus compatibility with the Apache Deltacloud application programming interface (API).

In terms of stock performance, Red Hat shares have gained nearly 55% since the beginning of the year. 

Full Disclosure: None.