RALEIGH, N.C. (AP) – Shares of Red Hat Inc., a leading provider of the open source Linux operating system and services, surged 14 percent in after-hours trading after the company’s third-quarter earnings exceeded analysts’ predictions.
Red Hat reported Thursday that its third-quarter profit sank 37 percent because of stock options expenses and tax provisions.
For the three months that ended Nov. 30, earnings dropped to $14.6 million, or 7 cents per share, down from $24.6 million, or 12 cents a share in the same period last year.
Excluding stock options expenses and income tax provisions, profit totaled $29.6 million, or 14 cents per share.
Analysts surveyed by Thomson Financial had forecast a profit of 12 cents per share, excluding options expenses.
“This quarter’s performance was characterized by strong market demand and solid execution,” Charlie Peters, Red Hat’s executive vice president and chief financial officer, said in a statement.
The company said it added 12,000 net customers in the quarter and continued integrating JBoss, a middleware maker Red Hat acquired in April. Red Hat started offering the JBoss open source application server in early September.
“We’re beginning to see the synergies that we had hoped to see,” Red Hat Chairman Matthew Szulik said Thursday after markets closed.
Revenue rose 45 percent to $105.8 million from $73.1 million in the year-ago quarter. Analysts expected $104.2 million in sales.
Red Hat shares rose $2.45, or 13.6 percent, to $20.41 in after-hours trading.
In October, shares of Red Hat tumbled 24 percent on the news that Oracle Corp. will move aggressively onto Red Hat’s turf by selling maintenance services for Red Hat products.
Szulik said Thursday that Red Hat will remain competitive in the open-source market, which he said is being embraced by more companies and government agencies worldwide.
When asked about Oracle’s plans to offer similar product-support services at reduced prices, Szulik said companies deploying open source are “not differentiated exclusively by price, they’re differentiated by value.”
“Our brand and our reputation is world-recognized,” Szulik said. “The continued innovation in the next quarter will allow us to compete successfully.”
The company said it plans to introduce a new product lineup in the first six months of the new year.
Unlike Microsoft Corp.’s market-dominating Windows operating system, Raleigh-based Red Hat distributes the open-source Linux system for free. The company makes money by selling service and support.
