Red Hat Inc., (RHT), Wednesday reported an increase in profit for the third quarter driven largely by 18 percent growth in revenues. Earnings for the quarter topped Wall Street estimates, however, revenues fell short of expectations. Shares of the Linux software maker slipped 12 percent after its CFO Frank Calderoni announced resignation.
Frank Calderoni announced his decision to step down as Chief Financial Officer of Red Hat, effective in late January 2017, in order to join as CEO of another company. Red Hat has appointed Eric Shander, Vice President, Finance and Accounting to act as the CFO, pending a decision on a permanent replacement.
Raleigh, North Carolina-based Red Hat's third-quarter profit rose to $67.9 million or $0.37 per share from $46.8 million or $0.25 per share last year.
Adjusted earnings for the quarter rose to $0.61 per share from $0.48 per share last year. Analysts polled by Thomson Reuters estimated earnings of $0.58 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter grew 18 percent to $615.3 million from $523.6 million last year. Analysts had a consensus revenue estimate of $618.02 million for the quarter.
Subscription revenue, which represents the major chunk of revenues, increased 19 percent to $543.3 million.
Looking forward to the full year, Red Hat expects adjusted earnings of about $2.27 per share and revenues of $2.397 billion to $2.405 billion. Analysts currently estimate earnings of $2.22 per share and revenues of $2.42 billion.
Earlier, Red Hat expected adjusted earnings of $2.23 to $2.25 per share and revenues of $2.42 billion to $2.44 billion.
For the fourth quarter, Red Hat expects adjusted earnings of about $0.61 per share and revenues of $614 million to $622 million. Analysts currently estimate earnings of $0.61 per share and revenues of $637.44 million.
RHT closed Wednesday's trading at $79.79.04, up $0.40 or 0.50% on the NYSE. The stock, however, dropped $9.49 or 11.89% in the after-hours trading.
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