Red Hat Inc Q2 Sales Up 19%, Earnings Beat The Street; Shares Move Lower

Shares of

are trading down about two percent in Thursday's post-market session despite better-than-expected second-quarter results. About an hour after the closing bell, Red Hat shares last traded at $59.20. The company posted quarterly sales of $445.899 million, up about 19 percent from the $389 million issued in the same quarter last year. Analysts had been expecting Red Hat to report revenue just under $435 million. Red Hat's sales in the Subscriptions segment were up 19 percent to $389.495 million, while sales to the Training and Services segment rose 18 percent to $56.4 million. Net income on a GAAP basis totaled $47 million, up nearly 15 percent from $41 million reported in the year-ago quarter. On an adjusted, non-GAAP basis, net income was $78 million, or $0.41 per share. This was up more than 17 percent on a year-over-year basis. Wall Street analysts were looking for Red Hat to post quarterly EPS of $0.38. Red Hat's Pres and CEO Jim Whitehurst said, "Broad demand for open source technologies, combined with Red Hat's value proposition and market leadership position, has helped to drive organic revenue growth in the mid-to-high teens for the last 10 quarters. Our high level of execution and commitment to investing across our technology stack, including enabling open, hybrid cloud computing in the enterprise, has led to Red Hat being recognized once again by Forbes, Inc. on its list of the World's Most Innovative Companies." On the company's earnings conference call, CFO Charles Peters gave some guidance. Red Hat is currently expecting Q3 sales in the $449-$452 million range, on EPS around $0.40. Analysts are currently expecting sales of $457.8 million on EPS of $0.41. For the FY15, Red Hat boosted its EPS guidance from $1.52-$1.54 to $1.53-$1.55 vs a $1.54 analyst estimate. Sales guidance for the year raised from $1.76-$1.785 billion to $1.77-$1.785 billion. Analysts expecting sales around $1.78 billion.