TMCnet News
Red Hat shares rise on earnings, acquisitionDec 21, 2012 (The News & Observer (Raleigh - McClatchy-Tribune Information Services via COMTEX) -- Shares of Linux software company Red Hat rose as much as 7 percent in after-hours trading after the company reported better-than-expected quarterly revenue and announced a $104 million acquisition designed to expand its cloud computing offerings. The Raleigh-based company said Thursday that it has agreed to acquire ManageIQ, a New Jersey company whose software reduces the complexity and cost of managing cloud computing. "It's a sizable opportunity," CEO Jim Whitehurst told analysts during a conference call. "We're very excited about the technology." Charlie Peters, Red Hat's chief financial officer, said ManageIQ is a startup with a couple dozen customers and 37 employees. "In terms of revenue it's not significant," he said. Red Hat's modus operandi with acquisitions is to acquire fledgling companies with promising open-source technology that it can integrate into its products and then apply its sales and marketing muscle. ManageIQ is the company's fourth acquisition in the last 14 months. "We see the market moving here," Peters said. "We think there is a lot of growth to be had." Red Hat's open-source software is free, but the company makes money by charging customers for maintenance and support and for services such as training and consulting. Red Hat reported after the markets closed on Thursday that revenue for the fiscal third quarter that ended Nov. 30 rose 18 percent to $343.6 million. Analysts polled by Bloomberg News were anticipating $338.1 million in revenue. Revenue would have been $7 million higher if not for the impact of currency fluctuations, mostly the weak Euro, Peters said in an interview. Net income, after excluding stock compensation and amortization, totaled $56.9 million, or 29 cents per share, versus $55.7 million a year ago. Net income was in line with analysts' estimates. "We continue to execute well and grow solidly even in an uncertain economic environment," Peters said. Earlier Thursday, Red Hat shares closed at $52.61, up 41 cents. Its shares have risen 27 percent this year. Red Hat is in the midst of moving its headquarters from N.C. State University's Centennial Campus to downtown Raleigh. Today the company has 1,000 or so employees at the two locations, up from roughly 600 local workers when the company announced the move in the summer of 2011. The company's local work force has grown much faster than anticipated, Peters said. Overall the company has more than 5,300 employees worldwide and is on track to add 900 to 1,000 workers in the current fiscal year. Ranii: 919-829-4877 ___ (c)2012 The News & Observer (Raleigh, N.C.) Visit The News & Observer (Raleigh, N.C.) at www.newsobserver.com Distributed by MCT Information Services |