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Red Hat, Inc.

5/19/2013, 3:36 PM ET

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Thursday, April 18, 5:45 PM Once again this year, some enterprise IT names are falling in AH trading in response to a weak earnings report. This time, the culprit is IBM, which posted a huge revenue miss thanks in large part to a 17% Y/Y drop in hardware sales. Flat software sales didn't help either. Big Blue tried to put much of the blame on deal-closing/execution issues, but the fact U.S. federal and China were named as weak spots might have some investors an edge. EMC -1.3%. HPQ -1.1%. CSCO -0.7%. RHT -1.2%. Comment! [Tech, On the Move]
Monday, April 15, 4:13 PM Red Hat (RHT) announces a new $300M buyback plan, good for repurchasing 3.1% of shares at current levels. The Linux kingpin adds it has used up the $179M remaining on a prior $300M authorization since the end of its Feb. quarter. The new authorization arrives with Red Hat trading not too far from its 52-week low. Shares +0.6% AH, following a rough quarter for the company and many other enterprise IT names. (PR) Comment! [Tech, Breaking News]
Thursday, April 4, 4:38 PM F5 (FFIV) resumes trading and is currently at $75.85, down 16.1% AH in response to its FQ2 warning, which (in the wake of Oracle's results) is bound to heighten concerns about U.S./European enterprise IT demand. Rivals and peers are off in sympathy: CSCO -2.3%. RVBD -3.7% CTXS -3.7%. JNPR -5.1%. VMW -2.2%. EMC -0.9%. RHT -1.7%. Comment! [Tech, On the Move]
Tuesday, April 2, 9:42 AM Red Hat (RHT) hires Microsoft vet Radhesh Balakrishnan, most recently the Asia-Pac chief for the Windows Azure cloud infrastructure platform, to be the new virtualization software unit. Red Hat has bet big on virtualization in recent years, viewing it as a key component of its growing IT infrastructure product line. But Red Hat faces an uphill battle taking share from leaders VMware and Microsoft. (PR) Comment! [Tech]
Thursday, March 28, 11:00 AM Red Hat (RHT -0.1%) has almost fully erased the huge AH losses it saw yesterday following its FQ4 revenue miss. Expectations had fallen over the last 2 months, and management's earnings call commentary about strong $1M+ deal activity and growing demand for non-OS products (50% of top-30 deals included middleware, and 4 were middleware-only). Needham is cutting estimates due to Red Hat's guidance, but likes the strong middleware activity, and the fact its 25 biggest deal renewals were renewed at over 120% of their prior value. Comment! [Tech, Earnings]
Wednesday, March 27, 5:49 PM After-hours top gainers, as of 5:15 p.m.: GBX +3%. GNW +3%. LCC +3%. MATX +1.4%. SU +1.1%.
After-hours top losers: ARRY -12%. RHT -9%. FIVE -7%. ESI -6%. PVH -5%. Comment! [On the Move]
Wednesday, March 27, 5:36 PM Red Hat (RHT) guides on its FQ4 call for FQ1 revenue of $358M-$361M and EPS of $0.30-$0.31, below a consensus of $366.6M and $0.32. FY14 guidance is for revenue of $1.51B-$1.54B and EPS of $1.31-$1.35, below a consensus of $1.55B and $1.38. Management has referenced macro issues (in the U.S., Europe, and Japan) a few times, and has also mentioned U.S. federal "uncertainty." Analysts have provided pointed questions about Red Hat's invoicing terms, as unbilled backlog grows at a faster pace than billings. Shares pare their losses, -5.4% AH. Comment! [Tech, Earnings]
Wednesday, March 27, 4:20 PM More on Red Hat: No explanation given for revenue miss. Deferred revenue balance +15% Y/Y in FQ4 to $1.09B; 21% growth was recorded in FQ3. Total backlog +19% to $1.37B. Subscription revenue +19% Y/Y (even with FQ3) and 87% of total. Opex +19% Y/Y, a little above rev. growth. Gross margin was 84.6%, -50 bps Y/Y. RHT -12% AH. CC at 5PM ET (webcast), guidance should be provided. (PR) (recent downgrades: I, II) 1 Comment [Tech, Earnings]
Wednesday, March 27, 4:07 PM Red Hat (RHT): Q4 EPS of $0.36 beats by $0.06. Revenue of $348M (+17% Y/Y) misses by $1.6M. Shares -6.9% AH. (PR) Comment! [Earnings, Breaking News, Tech, On the Move]
Wednesday, March 27, 12:10 AM Notable earnings after Wednesday ’s close: FIVE, PAYX, PVH, RHT, XONE Comment! [Earnings]
Tuesday, March 26, 5:35 PM Notable earnings after Wednesday ’s close: FIVE, PAYX, PVH, RHT, XONE Comment! [Earnings]
Monday, March 25, 12:25 PM Raymond James downgrades Red Hat (RHT -5.2%) to Market Perform two days before its FQ4 report arrives. Analyst Michael Turtis expects FQ4 results to meet expectations, but thinks the enterprise software vendor's FY14 guidance could disappoint. Red Hat is down 16% from its early Feb. high, and close to its 52-week low. Citi downgraded shares on March 12. Comment! [Tech, On the Move]
Thursday, March 21, 11:39 AM Evercore and CLSA have downgraded Oracle (ORCL -8.8%) following its FQ3 miss and light top-line guidance. The numbers have many worried about the impact of cloud apps ... and not just on application software sales. "As customers move to the cloud, you get a lot of the functionality consolidated ... so you need less hardware and less databases and middleware," says Pac Crest. UBS is still bullish: "Historically when they have a miss it’s a great time to buy." Interestingly, cloud rivals are higher - WDAY +1.4%, CRM +0.4%, N +1.2% - even as other peers follow the tech sector lower. IBM -1.6%. INFA -1.6%. RHT -1.1%. (transcript) 4 Comments [Tech, On the Move]
Wednesday, March 20, 4:44 PM Some enterprise IT names slump in response to Oracle's FQ3 miss, which included a surprising 2% Y/Y drop in new software license/cloud subscription revenue, and a 23% Y/Y drop in hardware product sales. InfiniBand hardware supplier Mellanox (MLNX) is the worst-hit, -7% AH. IBM -1%. HPQ -1%. EMC -1.2%. RHT -1.9%. VMW -1%. TIBX -1.2%. TDC -1%. Archrival SAP is unchanged for now. Comment! [Tech, On the Move]
Tuesday, March 12, 6:26 PM "Inputs from partners have turned less positive and hiring entering Q1 is seasonally weaker than prior years," wrote Citi's Walter Pritchard in his downgrade of Red Hat (RHT -4.8%). He's particularly worried about a "lack of traction" in the non-Linux fields (virtualization, middleware, storage file systems, cloud management) Red Hat has aggressively expanded into in recent years, and where competition is provided by VMware, Microsoft, IBM, and others. Pritchard also notes VMware's multiples have "come down significantly, leaving Red Hat an outlier." 2 Comments [Tech]
Tuesday, March 12, 9:47 AM A downgrade to Neutral from Citi sends Red Hat (RHT -4.7%) lower: the firm cites slowing growth and a lack of catalysts. Red Hat is expected by the Street to post 16% growth in FY14 (ends Feb. '14) on top of 17% growth in FY13. FQ4 results arrive on March 27. Comment! [Tech, On the Move]

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