Red Hat stock jumped over 13% after hours following a strong 3Q earnings report: EPS excluding options expenses were $0.14/share ($29.6 million), beating analyst estimates of $0.12/share; revenues were $105.8 million, while analysts expected $104.2 million. Actual earnings for the Linux distributor were $14.6 million, down 37% y/y due to high options and tax expenses. Subscription revenue came in at $88.9 million, up 48% year over year, and the company added 12,000 new subscribers this quarter. CFO Charlie Peters gave Q4 guidance for "revenue in the range of $112 million to $113 million" and "non-GAAP adjusted earnings per share assuming a 5% cash tax rate of between $0.14 and $0.15 per share... Q4 GAAP earnings of approximately $0.07 to $0.08 per share." In the conference call, CEO Matthew Szulik suggested that the two recent competitive threats -- Oracle's entry to the Linux market and the Microsoft/Novell Linux partnership -- will actually help Red Hat: "we are optimistic that our long-term competitive positioning is being enhanced by the market participation of larger entrants... The continued loyalty shown by our customer base, particularly during a period of increased competitive activity, was resonant in Q3." Bookings by geography: 60% from Americas, 24% from EMEA, 16% from Asia-Pacific. Regarding the JBoss acquisition, Szulik said "We're beginning to see the synergies that we had hoped to see."
• Sources: Full Red Hat F3Q07 Conference Call Transcript, press release, Red Herring, CNET News, Associated Press, InfoWorld, Reuters
• Related commentary: Customer Backlash Against Oracle's Buggy Linux Product?, Survey Finds Red Hat Customers Willing To Stay With Company if it Cuts Prices, Oracle Taking On Red Hat in Linux Market, Novell: We Didn't Sell Our Soul To Microsoft, Red Hat Switching From Nasdaq Listing to NYSE
• Potentially impacted stocks and ETFs: Red Hat (NYSE:RHT) Competitors: Novell (NASDAQ:NOVL), Oracle (NYSE:ORCL), VA Software (LNUX)
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