Shares of Red Hat (NYSE:RHT), the distributor of a popular commercial Linux operating system and a competitor of Microsoft (NASDAQ:MSFT), took a hit Thursday thanks to weak first-quarter billing results and a lackluster outlook.
The stock fell as low as 10% in premarket trading before leveling out to roughly 6% losses Thursday afternoon.
Earnings were up, improving to $37.5 million from $32.5 million in the year-ago period. Adjusted earnings of 30 cents per share topped expectations of 27 cents, and revenues, which grew 19% to $314.7 million, beat calls for $310.8 million.
That silver lining, though, was overshadowed by both the billing struggles and a dull revenue forecast. Red Hat posted $310 million in Q1 billings, but analysts had expected $319 million, missing expected year-over-year billings growth by 4%. Analysts also had been expecting around $1.35 billion in revenue for 2012, but Red Hat now is forecasting only $1.32 billion to $1.34 billion.
The lowered outlook is partly thanks to weak foreign economies, particularly in Europe and Japan. About 40% of the company’s revenue comes from foreign markets, according to Reuters.
MU posted a loss of 32 cents per share in Q3, far worse than analyst predictions for 20 cents. However, revenues broke a four-quarter downward trend, increasing 1.5% to $2.17 billion. The net loss of $320 million, though, along with shrinking margins for the fifth-straight quarter, weighed on investor sentiment.