Red Hat Stock Sinks After Hours on Weak Guidance


Red Hat (NYSE:RHT) unveiled its latest quarterly earnings results, which topped analysts’ expectations, but its shares were stagnant as its current-quarter guidance missed the mark.

Red HatThe company posted first-quarter earnings of 72 cents per share on an adjusted basis to kick off its fiscal 2019. Analysts were calling for adjusted earnings of 69 cents per share, according to data compiled by Thomson Reuters.

Red Hat’s revenue tallied up to $813.5 million for the period, which was also ahead of the $807.5 million that Wall Street projected in its consensus estimate, per Thomson Reuters. Revenue also increased about 20% compared to the year-ago quarter.

The bulk of the company’s revenue comes from its subscriptions, which raked in $711.5 million during the period, a 19.3% gain compared to the year-ago quarter. The figure missed the Wall Street outlook of $713 million, according to Thomson Reuters.

For its second quarter, Red Hat said it forecasts adjusted earnings of 81 cents per share, while revenue is slated to be in the range of $822 million and $830 million. The figure was below expectations as analysts are predicting adjusted earnings of 89 cents per share and revenue of $854.9 million, per Thomson Reuters.

For its fiscal 2019, Red Hat predicts that adjusted earnings will be in the range of $3.44 to $3.48 per share, while the revenue outlook is between $3.38 billion and $3.41 billion. Analysts see adjusted earnings of $3.42 per share and revenue of $3.45 billion for the year, per Thomson Reuters.

RHT stock fell about 2.1% during regular trading hours on Thursday and the stock plummeted close to 12.3% after the bell on its weak guidance.

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