Red Hat Falls On Sharp Numbers

A disappointing second quarter for the Linux distributor met with fierce retribution from shareholders in trading. That sharp whistling sound was that of financials on September 26th. Investors did not take the news well, despite revenue growth of 52 percent: Net income for the quarter was $11.0 million or $0.05 per diluted share compared with $16.7 million or $0.09 per diluted share for the second quarter of the last fiscal year. Due to differences in the accounting treatment for taxes and stock compensation expense between fiscal 2006 and 2007, net income is not directly comparable between these periods. Investors may be taking a harder look at the company's free cash flow. They may be looking at it too hard, according to Despite Red Hat's JBoss acquisition providing $7 million in revenue, that $350 million purchase could be part of the disappointing earnings side, MarketWatch Red Hat is taking the numbers in stride. Said Peters, "Revenue grew nicely and we expect the recent introduction of the Red Hat Application Stack will help continue that trend. We expect operating results and cash flow will improve in the second half of fiscal 2007 since much of the heavy integration work is behind us already." Tag: Add to Del.icio.us | Digg | Yahoo! My Web | Furl Bookmark Murdok: David Utter is a staff writer for Murdok covering technology and business.