Red Hat, a leader in open source systems, servers and software, beat Street earnings estimates earlier in the week, but the stock took a nose dive largely due to what the company said about billings. By the numbers, Red Hat said late Wednesday that it expects adjusted earnings of 28 cents to 29 cents per share for the current quarter, on revenue of $320 million to $322 million.
Analysts, on average, were expecting earnings of 29 cents per share on revenue of $331 million.
However, as we said above, the catalyst for the decline was billings. Many analysts expected a bigger increase in bookings than the 16 percent rise the company reported for its fiscal first quarter.
Citi Investment Research analyst Walter Pritchard said the market expected billings to rise 18 percent to 19 percent. He had forecast an even bigger 22 percent increase.
Was the decline justified or is the stock oversold?Don’t make a move until you check out our exclusive interview with Red Hat CEO James Whitehurst. Watch the video now!
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