UPDATE 2-Red Hat outlook beats Wall Street view

* Sees Q4 profit, revenue ahead of Street view

* Q3 EPS ex-items 20 cents vs Wall Street view 20 cents

* Q3 revenue up 21 pct to $236 mln vs Street view $227 mln

* Shares fall 2.7 percent from near 52-week high (Revises first sentence, adds CEO comments, financial details, updates share movement)

By Jim Finkle

BOSTON, Dec 21 (Reuters) - Business software maker Red Hat Inc RHT.N issued an outlook for profit and revenue above Wall Street projections on Tuesday, echoing optimism about the technology spending climate shown by bigger industry companies last week.

Red Hat Chief Executive Jim Whitehurst said that market demand for his company’s products was “strong” as revenue exceeded Wall Street projections.

“We are seeing expansion of green shoots,” he said in an interview.

The world’s largest distributor of the open-source Linux operating system said it expects to post profit, excluding items, of 21 to 22 cents per share in its fourth quarter ending Feb. 28. Analysts, on average, expect it to post profit of 20 cents, according to Thomson Reuters I/B/E/S.

Red Hat also projected fourth-quarter revenue of $234 million to $236 million, above the average analyst forecast of $228 million.

Whitehurst said that his optimism was fueled by strong sales during the third quarter, which will be recognized over the coming year.

Red Hat sells subscriptions to upgrades, bug fixes and help desk support for its business software, including the widely used Linux operating system.

Billings of new subscriptions grew about 20 percent in the third quarter, their fastest rate since the recession began, he said.

“It’s good to see that re-acceleration of the business,” he said.

Profit for the third quarter ended Nov. 28 was $26 million or 13 cents per share compared with $16.4 million or 8 cents a share a year ago. Non-GAAP net income for the quarter rose to $39.1 million or 20 cents a share versus $33.5 million or 17 cents a year ago. This was in line with the average analyst forecast of 20 cents a share, according to Thomson Reuters I/B/E/S.

Quarterly revenue climbed 21 percent from a year earlier to $236 million, beating the average forecast of $227 million.

Software giant Oracle Corp ORCL.O, technology services firm Accenture Plc ACN.N and BlackBerry maker Research in Motion RIM.TO last week released stronger-than-expected results, igniting hopes that for a recovery in technology spending. [ID:nN17101868].

Shares of the Raleigh, North Carolina, company fell 2.7 percent to $46.58 in extended trading. They had closed at $47.88 on the New York stock exchange, near their 52-week high of $49.00. (Reporting by Jim Finkle, editing by Matthew Lewis)