Red Hat Earnings Fall as Expenses Surge; Shares Slip After Hours
Shares of Linux software vendor Red Hat are falling after hours after the company reported earnings that fell year on year, weighed down by an increase in investments and acquisition-related expenses.
Red Hat reported a per-share profit of 18 cents, missing the consensus of analysts, who had expected 29 cents a share. Net profit was $35 million, down from $40 million in the year-ago period. Sales were $323 million, up 15 percent year on year. Most of that was subscription revenue, which at $279 million was up 17 percent versus last year.
CFO Charlie Peters said in a statement that costs related to a new storage product increased expenses, as did two small acquisitions. Operating expenses were $224.7 million, up more than 23 percent from last year. The acquisitions reduced EPS by one cent.
Red Hat shares fell $1.52, or more than 2 percent, to $56.02 after hours. The shares closed at $57.54 during the regular session, down slightly. Before today’s after-hours drop, the shares had risen about 39 percent this year.