UPDATE 3-Red Hat results beat Street, shares rise

* Latest business software co to beat expectations

* Suggest revival in corporate spending on tech

* Shares rise almost 7 pct in extended trade
(Adds analyst and company comments, outlook)

By Jim Finkle

BOSTON, Dec 22 (Reuters) - Red Hat Inc's (RHT.N) reported
results that beat Wall Street estimates as an improving economy
and reviving corporate spending fueled sales of its business
software, sending shares up almost 7 percent after-hours.

Its results are the latest to suggest that spending on
computer technology is on the mend. Oracle Corp (ORCL.O), the
world's No. 2 maker of business software, last week reported a
surprise sales increase. Tibco Software Inc (TIBX.O) also
announced on Tuesday higher-than-forecast earnings.
[ID:nWNBB3879]

"An improving macro is driving accelerated top line
growth," said Nabil Elsheshai, an analyst with Pacific Crest
Securities.

Red Hat Chief Executive Jim Whitehurst said he was seeing
strength "across the board" in North America and Europe, though
growth was picking up more quickly in the United States.

Whitehurst, whose chief rival is Microsoft Corp (MSFT.O),
said sales to financial services companies and government
agencies were particularly strong during the quarter.

He said in an interview that customers have gotten
interested in starting new projects again, which he sees as a
sign that technology spending is recovering.

"Our pipeline remains quite strong. We're optimistic about
the business going forward," he said.

Red Hat reported a profit, excluding items, of 17 cents per
share for its fiscal third quarter, ended Nov. 30, beating the
Wall Street average forecast of 16 cents, according to Thomson
Reuters I/B/E/S.

Third-quarter revenue rose to $194 million, beating the
average forecast of $188 million.

Red Hat forecast fourth-quarter profit, excluding items, of
15 to 16 cents per share, on revenue of $191 million to $193
million. Analysts expect profit of 16 cents per share on
revenue of $190 million.

Third-quarter net income fell to $16.4 million, or 8 cents
per share, from $24.3 million, or 12 cents, a year earlier.
Red Hat's results in the most recent quarter were hurt by a
3-cent charge to settle a class-action lawsuit.

The software maker's shares rose nearly 7 percent in
after-hours trading to $31.90 after closing at $29.87 on the
New York Stock Exchange.
(Reporting by Jim Finkle; Editing by Andre Grenon, Matthew
Lewis and Steve Orlofsky)