Fool Cheat Sheet: Red Hat Earnings

Before you go, we thought you'd like these...
Before you go close icon

Red Hat (NYS: RHT) reported earnings on Dec. 19. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Nov. 30 (Q3), Red Hat met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly, and earnings per share improved significantly.

Margins expanded across the board.

Revenue details
Red Hat logged revenue of $290 million. The 22 analysts polled by S&P Capital IQ looked for revenue of $290 million. Sales were 23% higher than the prior-year quarter's $236 million.

anImage

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.28. The 24 earnings estimates compiled by S&P Capital IQ anticipated $0.26 per share on the same basis. GAAP EPS of $0.19 for Q3 were 46% higher than the prior-year quarter's $0.13 per share.

anImage

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 84.4%, 130 basis points better than the prior-year quarter. Operating margin was 18.5%, 240 basis points better than the prior-year quarter. Net margin was 13.2%, 220 basis points better than the prior-year quarter.

anImage

Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $292 million. On the bottom line, the average EPS estimate is $0.26 (There are 21 revenue estimates and 24 EPS estimates.)

For the full year ending 2012, the average estimate for revenue is $1.1 billion. The average EPS estimate is $1.07. (There are 23 revenue estimates and 25 EPS estimates.)

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 601 members out of 731 rating the stock outperform, and 130 members rating it underperform. Among 188 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 164 give Red Hat a green thumbs-up, and 24 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Red Hat is outperform, with an average price target of $49.09.

At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story

Want more news like this?

Sign up for Finance Report by AOL and get everything from business news to personal finance tips delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

From Our Partners