Red Hat raises forecast after results beat estimates

Thu Dec 19, 2013 6:17pm EST

(Reuters) - Red Hat Inc (RHT.N), the world's largest commercial distributor of the Linux operating system, reported third-quarter results above analysts' estimates, helped by higher growth in billings, and it raised its full-year forecast.

Red Hat shares were up 10 percent at $54.00 in extended trading.

Red Hat raised its full-year adjusted earnings forecast to $1.46-$1.48 per share from $1.36-$1.38.

The company lifted its revenue forecast to $1.531-$1.534 billion from $1.51-$1.52 billion.

Analysts on average were expecting earnings of $1.38 per share, on revenue of $1.52 billion, according to Thomson Reuters I/B/E/S.

The higher billings growth in the third quarter was due in part to the strengthening of the company's European and U.S. government businesses, Chief Financial Officer Charlie Peters said in a statement.

For the year ended February 28, about 11 percent of the company's total revenue was generated by the U.S. government.

Billings proxy in the third quarter grew 19 percent to $453 million.

The company defines billing proxy as its total revenue combined with the change in deferred revenue.

Analysts had questioned Red Hat's ability to sustain billings growth at a mid-teen percentage rate after the company missed analysts' growth forecast in the second quarter.

The company's net income jumped 49 percent to $52 million, or 27 cents per share, in the quarter ended November 30, from a year earlier. Excluding items, the company earned 42 cents per share.

Revenue rose 15 percent to $397 million.

Analysts on average had expected earnings of 35 cents per share, on revenue of $383.1 million.

Subscription revenue jumped 17 percent to $343 million.

(Reporting by Neha Alawadhi in Bangalore; Editing by Maju Samuel)

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