Red Hat Beats on Both Top and Bottom Lines
Red Hat (NYS: RHT) reported earnings on June 20. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended May 31 (Q1), Red Hat beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly and GAAP earnings per share increased.
Gross margins expanded, operating margins grew, net margins contracted.
Red Hat logged revenue of $314.7 million. The 24 analysts polled by S&P Capital IQ expected a top line of $310.7 million on the same basis. GAAP reported sales were 19% higher than the prior-year quarter's $264.7 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.30. The 26 earnings estimates compiled by S&P Capital IQ predicted $0.27 per share. GAAP EPS of $0.19 for Q1 were 12% higher than the prior-year quarter's $0.17 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 85.4%, 140 basis points better than the prior-year quarter. Operating margin was 17.2%, 10 basis points better than the prior-year quarter. Net margin was 11.9%, 40 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $322.0 million. On the bottom line, the average EPS estimate is $0.29.
Next year's average estimate for revenue is $1.33 billion. The average EPS estimate is $1.19.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 617 members out of 754 rating the stock outperform, and 137 members rating it underperform. Among 186 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 161 give Red Hat a green thumbs-up, and 25 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 $60.00.
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The article Red Hat Beats on Both Top and Bottom Lines originally appeared on Fool.com.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.
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