Red Hat (NYSE:
) is down on Thursday after topping EPS estimates, but falling
short of revenue expectations.
The Raleigh, North Carolina firm posted earnings of $0.36 per
share, up 24 percent from Q4 fiscal 2012. This figure comfortably
topped the Wall Street consensus of $0.30.
Fourth quarter revenue climbed 17 percent to $348 million, but
fell short of the $349.64 million analysts hoped for.
Fiscal 2013 earnings grew around 12 percent to $1.23 per
share, beating estimates of $1.17.
Full-year revenue closed up 17 percent and finished in line
with expectations at $1.33 billion.
Subscription Revenue Drives Growth
Subscription revenue rose 18.7 percent year-over-year during
the fourth quarter and finished at $302.8 million, accounting for
87 percent of Red Hat's revenue.
Meanwhile, this segment climbed 19 percent in fiscal 2013 and
rounded out at $1.15 billion. It accounted for 86.5 percent of
the company's revenue.
Red Hat acquired ManageIQ, a company that provides enterprise
cloud management and automation solutions, during the fourth
quarter. The company expected the deal to "expand the reach of
its hybrid cloud management solutions for enterprises."
Ultimately, the open source software firm paid a bit over $104
million for the acquisition.
Red Hat reported Thursday that a patent lawsuit brought
against it and Rackspace Hosting (NYSE:
) has been dismissed.
The lawsuit, filed by patent assertion entity Uniloc USA,
Inc., was filed in federal court in the Eastern District of
Texas. It alleged that the processing of floating point numbers
by the Linux operating system violated US Patent 5,892,697.
However, Chief Judge Leonard Davis ruled that the claim was not
patent-able under Supreme Court case law, which bans the
patenting of mathematical algorithms.
Customer Base and Revenue to Grow?
According to a
Technology Business Research (TBR) story via WRAL
, TBR expects Red Hat to grow over 15 percent across CY 2013 by
"expanding current cross-selling of cloud, virtualization and big
data to its core Linux and middleware install bases."
Also, TBR believes the company will make "targeted
acquisitions in CY2013 to bridge its core portfolio products to
its new addressable markets that will help the vendor drive
The article goes on to mention that Red Hat "is positioned for
revenue gains in CY13, courtesy of a perfect storm of portfolio
growth and proven technology expertise."
Investors do not seem to agree with TBR's assessment of Red
Hat thus far. After two consecutive days of gains pushed it near
$50 on Wednesday, the stock has dropped below $48 in the morning
hours on Thursday.
Red Hat is down over four percent.
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