Red Hat (RHT) Beats Q1 Earnings, Shares up on Positive View

Red Hat Inc. RHT reported first-quarter 2018 adjusted earnings (including share-based compensation) of 40 cents per share, beating the Zacks Consensus Estimate by 6 cents. Adjusted earnings (excluding share-based compensation) increased 12.8% year over year to 56 cents per share, which was better-than the guided range of 52–53 cents per share.

Revenues increased 19.2% year over year to $676.8 million, primarily driven by strong subscription revenues and cross-selling of cloud-enabled technology. The figure was better than the Zacks Consensus Estimate of $647 million and also better than the guided range of $643–$650 million.

Revenues (adjusted for currency impact) increased 20.1% year over year to $681.9 million. The company noted that 72% of the revenues came from the channel, while 28% came from direct sales force compared with a 78%– 22% split in the year-ago quarter. The year-over-year change in mix was driven by a number of large deals that were closed by its direct sales team.

Americas, Europe, Middle East & Africa (EMEA) and Asia Pacific (APAC) revenues increased 19.6%, 20.1% and 22.2%, respectively. Per management, North America revenues were impacted by challenges in the LATAM region. Almost 55% of the bookings came from Americas, 24% from EMEA and 21% from APAC.
 

Red Hat, Inc. Price, Consensus and EPS Surprise

 

Red Hat, Inc. Price, Consensus and EPS Surprise | Red Hat, Inc. Quote

Based on the strong first-quarter results, management raised fiscal 2018 guidance. Shares rose more than 10% in after-hour trading.

We note that the stock returned 43.1% much better than S&P 500's gain of 9.9% on a year-to-date basis.

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