Red Hat Inc (NYSE:RHT)
On Wednesday after the close, Red Hat Inc. announced third-quarter earnings that came up short of expectations and also announced that its Chief Financial Officer Frank Calderoni was leaving the company for a CEO position somewhere else. The company announced adjusted earnings per share of 61 cents per share on $615.3 million in sales while analysts were looking for 58 cents per share on $619 million in sales.
They also came up short on Q4 outlook with revenues between $614-622 million while analyst were looking for around $638 million. Currently analyst have an average price target of $90.10 but will most likely change given the most recent financial results.
Red Hat Technicals
Shares of RHT closed Wednesday at $79.79 and opened Thursday at 70.30 marking an 11.8% drop in value overnight. This puts shares well below their 200-day moving average currently sitting at $75.48, but we should see some support come in at $67.50 and $60 with resistance coming at $72.50 and the 200-day moving average. Ideally we would like shares to stable off over the coming days forming a base to trade off of and until it does I will be staying away. Expect shares to remain volatile over the next couple weeks.
CEO Comments
In Q3, solid execution allowed us to continue to deliver double digit growth in a number of our financial metrics including revenue, non-GAAP operating income and non-GAAP EPS. Some key highlights in quarter include, strong demand for our cloud-enabling technologies, which is reflected in the 32% constant currency growth in our application development related and other emerging technologies revenue. Our continuing customer traction is evident in our top 25 renewals that were up for renewal this quarter; all 25 renewed, and they did so at more than a 120% of their prior annual commitment. –SeekingAlpha
Company Profile
Red Hat, Inc. engages in the provision of open source software solutions. The firm operates its business through the following graphical segments: Americas (the United States, Canada, and Latin America); EMEA (Europe, Middle East, and Africa); and Asia Pacific. It offers Red Hat Enterprise Linux; Red Hat JBoss Middleware; Red Hat Enterprise Virtualization; and Red Hat Storage Server. The company was founded by Robert F. Young in March 1993 and is headquartered in Raleigh, NC.