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Let's get straight to the point: this could very well be the breakout results investors were looking for in terms of Red Hat (RHT). The world's largest distributor of Linux operating systems posted results that blew expectations clearly out of the water and announced a $300 million dollar stock buyback.

Analysts were estimating EPS of $0.27/share and revenues of $291 million. RHT reported earnings of $0.29/share and revenues of $297 million (up 21% versus Q4 2010). Red Hat's solid revenue growth is due in part to the growing need for cloud based computing and increased IT spending throughout various industries.

The company said in a conference call (see call transcript) that it had secured multiple deals valued at $5 million during the quarter. "We experienced a significant increase in large deals, both in Q4 and for the full year," CFO Charlie Peters said in a statement.

Given the high demand for cloud based computing, investors should take long positions based on continued growth and increased sales. It should be noted that Red Hat has entered into several markets with their subscription based platforms. "The combination of demand for our subscription model and our expansion into markets such as retail, energy and health care give Red Hat an edge as more companies move toward cloud platforms," Red Hat CEO Jim Whitehurst said on a conference call with analysts.

Source: Red Hot Quarter For Red Hat