Red Hat Inc. Fourth Quarter Earnings Sneak Peek

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S&P 500 (NYSE:SPY) component Red Hat, Inc. (NYSE:RHT) will unveil its latest earnings on Wednesday, March 28, 2012. Red Hat is engaged in providing open source software solutions. They are known for their version of Linux, Red Hat Enterprise Linux.

Red Hat, Inc. Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 20 cents per share, a rise of 5.3% from the company’s actual earnings for the same quarter a year ago. The average estimate is the same as three months ago. Between one and three months ago, the average estimate was unchanged. It also has not changed during the last month. For the year, analysts are projecting net income of 81 cents per share, a rise of 35% from last year.

Past Earnings Performance: Last quarter, the company beat estimates by 2 cents, coming in at profit of 21 cents a share versus the estimate of net income of 19 cents a share. It marked the fourth straight quarter of beating estimates.

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Wall St. Revenue Expectations: On average, analysts predict $291.2 million in revenue this quarter, a rise of 19% from the year-ago quarter. Analysts are forecasting total revenue of $1.13 billion for the year, a rise of 24.3% from last year’s revenue of $909.3 million.

Analyst Ratings: Analysts are optimistic about this stock, with 14 analysts rating it as a buy, two rating it as a sell and five rating it as a hold.

A Look Back: In the third quarter, profit rose 47% to $38.2 million (19 cents a share) from $26 million (13 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 23.1% to $290 million from $235.6 million.

Key Stats:

The company enters this earnings announcement with substantial revenue momentum. The company has averaged year-over-year revenue growth of 25.7% over the last four quarters.

This upcoming earnings announcement will be a chance to build on positive earnings momentum over the last three quarters. Net income rose 34.8% in the first quarter and 69% in the second quarter before increasing again in the third quarter.

Stock Price Performance: Between December 23, 2011 and March 22, 2012, the stock price rose $9.95 (23.9%), from $41.59 to $51.54. The stock price saw one of its best stretches over the last year between October 4, 2011 and October 14, 2011, when shares rose for nine straight days, increasing 18.9% (+$7.55) over that span. It saw one of its worst periods between November 15, 2011 and November 25, 2011 when shares fell for eight straight days, dropping 14.8% (-$7.79) over that span.

(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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