Red Hat (RHT) Tops Q2 EPS by 3c, Offers Q3 & FY Gudiance

(Updated - September 21, 2015 4:21 PM EDT)

Red Hat (NYSE: RHT) reported Q2 EPS of $0.47, $0.03 better than the analyst estimate of $0.44. Revenue for the quarter came in at $504.1 million versus the consensus estimate of $494.65 million.

Outlook

Red Hat’s outlook assumes similar business conditions and foreign exchange rates as of September 18, 2015. The full year revenue guidance is increased to $2.034 billion to $2.044 billion. Full year non-GAAP operating margin is targeted to 23.6%, and cash flow is increased to $690 million to $705 million. Full year diluted non-GAAP earnings per share guidance is in the range of $1.85-$1.87 per share, assuming a $1 million per quarter forecast for other income, a 29% annual effective tax rate and 186 million fully diluted shares outstanding. Non-GAAP guidance is derived by subtracting the estimated full year impact of non-cash share-based compensation expense of approximately $160 million, amortization of intangible assets expense of approximately $24 million and non-cash interest expense from accretion of debt discount of approximately $19 million.

For the third quarter, Red Hat’s outlook is for revenue of $519 million to $523 million, non-GAAP operating margin of approximately 23.0% and non-GAAP earnings per share of $0.47. Non-GAAP guidance is derived by subtracting the estimated third quarter impact of non-cash share-based compensation expense of approximately $42 million and amortization of intangible assets of approximately $6 million, and non-cash interest expense from accretion of debt discount of approximately $5 million.

(Street sees FY EPS $1.83 on revenue of $2.02 billion. Q3 EPS is seen at $0.46 on revenue of $513.56 million)

For earnings history and earnings-related data on Red Hat (RHT) click here.

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