Red Hat (RHT) Tops Q2 EPS by 10c, Offers Outlook

Red Hat (NYSE: RHT) reported Q2 EPS of $0.77, $0.10 better than the analyst estimate of $0.67. Revenue for the quarter came in at $723 million versus the consensus estimate of $699.3 million.

Outlook: Red Hat’s outlook assumes current business conditions and current foreign currency exchange rates.

For the full year:

• Revenue is expected to be approximately $2.880 billion to $2.895 billion in USD.
• GAAP operating margin is expected to be approximately 15.9% and non-GAAP operating margin is expected to be approximately 23.8%.
• Fully diluted GAAP earnings per share (EPS) is expected to be approximately $1.89 to $1.91 per share, assuming 183 million fully diluted shares outstanding. Fully diluted non-GAAP EPS is expected to be approximately $2.77 to $2.79 per share, assuming 180 million fully diluted shares outstanding. Both GAAP and non-GAAP EPS assume a $1 million to $2 million per quarter forecast for other income and an estimated annual effective tax rate of approximately 28% before discrete tax items.
• Operating cash flow is expected to be approximately $880 million to $900 million.

(Street sees FY EPS of $2.69 on revenue of $2.81 billion)

For the third quarter:

• Revenue is expected to be approximately $730 million to $737 million.
• GAAP operating margin is expected to be approximately 15.2% and non-GAAP operating margin is expected to be approximately 23.7%.
• Fully diluted GAAP EPS is expected to be approximately $0.48 per share, assuming 184 million fully diluted shares outstanding. Fully diluted non-GAAP EPS is expected to be approximately $0.70 per share, assuming 181 million fully diluted shares outstanding. Both GAAP and non-GAAP EPS assume a $2 million per quarter forecast for other income and an estimated annual effective tax rate of 28% before discrete tax items.

(Street sees Q3 EPS of $0.70 on revenue of $710.9 million)

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

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