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)
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