Red Hat posts profit as revenue jumps

Red Hat Inc. said Tuesday it swung to a profit in its latest quarter as greater subscriptions to the company's Linux software helped revenue rise 43 percent.

Red Hat said it posted fiscal fourth-quarter net income of $5 million, or 3 cents a share, for the period ended Feb. 29.

That compares with the prior year's fourth-quarter loss of $273,000, which was break-even on a per-share basis.

Red Hat said its fourth-quarter revenue rose to $37 million from $25.9 million. The Raleigh-based company's top line was bolstered by subscription revenue, which jumped 79 percent to $25.9 million as the company added 87,000 new Linux subscriptions.

Red Hat's earnings were in line with its Dec. 19 projection and Thomson First Call's average analyst estimate. The company's revenue topped its own forecast of $36.2 million to $36.7 million.

Red Hat said the growth rates in adoption of Red Hat Enterprise Linux had exceeded its expectations to date and it is "positive" on its outlook for the coming fiscal year.

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Linux is a freely distributed operating system which has emerged as a chief rival to Microsoft's market-dominating Windows. Although programmers swap Linux source code freely, companies such as Red Hat sell versions of Linux tailored to specific tasks.

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For the full fiscal year, Red Hat said it swung to a profit of $14 million, or 8 cents a share. There was a loss of $6.6 million, or 4 cents a share, in the previous year, which included charges of $261,000 from discontinued operations and $2.3 million from acquisition costs.

Full-year revenue climbed to $126.1 million from $90.9 million for the previous year.

Red Hat's results were released Tuesday after financial markets closed. Shares of Red Hat closed at $19.41 Tuesday, up $1.08, or 5.9 percent, on heavy volume on the Nasdaq Stock Market.