RealTime IT News

Red Hat Tops Forecasts

Red Hat capped a rough day on Wall Street Tuesday with better than expected results after the close.

Red Hat's earnings of 13 cents a share were a penny ahead of estimates. Sales rose 37% to $78.7 million, beating $78.26 million forecasts. Subscription revenue rose 44% to $66.7 million. Margins also improved in the quarter, and the company boasted $1.1 billion in cash and investments at the end of the quarter.

"This past year's results affirmed our ability to scale for growth," Red Hat CFO Charlie Peters said in a statement. "Margins continued to expand even as we built out our infrastructure through investments in headcount and systems. Moreover, our cash flow from operations improved significantly in FY 2006."

The company's forward guidance was in line with estimates, but despite the solid numbers, Red Hat shares slipped 3% in late trading.

Accenture also beat Wall Street estimates after the close, but the company reported a large charge for contract losses and fell in after-hours trading.

The broader market tumbled Tuesday after the Federal Reserve continued its nearly two-year rate hike campaign and suggested that more rate hikes are on the way. Bond prices fell and oil prices surged.

The Nasdaq lost 11 to 2304, the S&P 500 fell 8 to 1293, and the Dow lost tumbled 95 to 11,154. Volume rose to 2.15 billion shares on the NYSE, and 2.04 billion on the Nasdaq. Decliners led 20-11 on the NYSE, and 18-12 on the Nasdaq. Downside volume was 73% on the NYSE, and 60% on the Nasdaq. New highs-new lows were 148-48 on the NYSE, and 198-32 on the Nasdaq.

Level 3 jumped 16% after raising guidance, while Lexar fell 7% on its guidance. Micron , which plans to acquire Lexar, lost 2%.