Red Hat revenue beats estimates on subscription gains
(Reuters) - Red Hat Inc, the world's largest distributor of Linux operating software, posted third-quarter revenue above analysts' estimates on strong growth in its subscription business, sending its shares up 6 percent in after-market trading.
The company also said it would buy privately held ManageIQ, which provides management and automation programs for cloud computing, for $104 million in cash.
The acquisition, its fourth since October last year, is not expected to have any material impact to Red Hat's revenue for the fiscal year ending February 28.
Red Hat expects to earn between 29 cents and 30 cents per share in the fourth quarter, on revenue of $347 million to $351 million, it said on a conference call with analysts.
Analysts were expecting earnings of 30 cents on revenue of $350.9 million, according to Thomson Reuters I/B/E/S.
Third-quarter net income fell to $34.8 million, or 18 cents per share, from $38.2 million, or 19 cents per share, a year earlier.
On an adjusted basis, the company earned 29 cents per share, in line with expectations. Revenue rose 18 percent to $344 million, beating estimates of $338 million.
Red Hat's subscription revenue rose 19 percent to $294.2 million in the quarter ended November 30.
Shares of the Raleigh, North Carolina-based company were trading at $55.60 after the bell. The stock closed at $52.61 on the New York Stock Exchange on Thursday.
(Reporting by Neha Alawadhi; Editing by Krishna N. Das)
© Thomson Reuters 2017 All rights reserved.