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Red Hat shares are taking a hit after hours
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Robert DeFrancesco’s TechStockProspector.com June 20, 2012 Red Hat (RHT) Tumbles 10% on Billings Shortfall *********************************************************************************** Read the latest issue of Tech-Stock Prospector on your Amazon Kindle or Kindle for iPad/iPhone reading app. See the June 2012 Table of Contents and order the issue here: http://www.amzn.com/B004T6Z0ME *********************************************************************************** Shares of Red Hat (RHT, $50.53 after hours), a provider of open source enterprise software, are off more than 10% after hours because the company came in with fiscal Q1 (ended May) billings of $310 million (+16% year over year), below the consensus estimate of $319 million. The drop in Red Hat is pulling down shares of other enterprise software vendors in after-hours trading: *VMware (VMW) -2.8% after hours *Citrix Systems (CTXS) -2.3% after hours *Tibco Software (TIBX) -1.8% after hours Red Hat saw billings growth decelerate from 31% in fiscal Q4 and 28% growth in the year-ago quarter. Management did say that bookings exceeded billings (a rare event for a fiscal Q1), meaning some deals signed in the May quarter would get billed in the current quarter. Other key metrics topped expectations: Per-share earnings of 30 cents beat the consensus by three cents and revenue of $314.7 million (+18.9% year over year) was above the consensus of $310.7 million. Cash flow from operations advanced 38% year over year to $124 million on strong collections. Operating margin of 25.8% beat guidance because of top-line growth, richer gross margin and slower-than-expected hiring. Deferred revenue rose 16% year over year to $913 million. But short-term deferred revenue ended the quarter down 4.1% sequentially to $682 million. Red Hat’s 25 largest accounts renewed at 120% of their original contract values. There were a record 25 deals worth more than $1 million each (including two greater than $5 million), vs. 14 in the year-ago quarter. About 40% of these large deals included a middleware component, with three being standalone middleware deals. For fiscal Q2, Red Hat sees revenue of $320 million to $322 million, below the consensus of $330.8 million, on EPS of 28 cents to 29 cents, in line with the consensus of 29 cents. For updates during the trading day, follow Rob on Twitter: @TechStockRadar *********************************************************************************** The June 2012 issue of Tech-Stock Prospector is available at TechStockProspector.com (subscription required), in the Amazon Kindle store (this includes the Kindle for iPad/iPhone reading app) and on the Barnes & Noble NOOK Newsstand. Here are some of the topics covered in the June 2012 issue: *Valuing Facebook *LinkedIn balances growth & valuation *Social media marketing M&A buzzes *The Salesforce/Oracle battle goes social *Bazaarvoice quickly bulks up *Mobile Megatrend Update: Qualcomm *Imperva builds its pipeline *Splunk delivers strong results *Zillow sees growth in rentals *Finding value in former highflyer Riverbed Technology *Signs of accelerated growth at Cornerstone OnDemand *Sourcefire set for expansion in networking security *Why Big Data needs Teradata *Infoblox knows your network *A Yahoo sum-of-parts valuation *TSP Deal Report: Citrix expands in mobile infrastructure To place an order, call TSP Customer Support at 800-392-0998 or visit TechStockProspector.com ------------------------------------------------------------------------------------------------------ Read the latest issue of Tech-Stock Prospector on your Amazon Kindle or Kindle for iPad/iPhone reading app. Here’s the Kindle link: http://www.amzn.com/B004T6Z0ME ------------------------------------------------------------------------------------------------------ Tech-Stock Prospector Managing Editor Rob DeFrancesco has more than 20 years of experience covering the tech sector. He is a former senior writer with Louis Rukeyser’s Wall Street. TechStockProspector.com, launched in 2003, is an investment-research service focused primarily on the networking, storage, security, wireless and software sectors. Annual subscription: $350. For more information or to place an order, call 800-392-0998.
