Red Hat Stock Plummets After Profit Dip
Shares of software maker Red Hat Inc. plummeted Wednesday, a day after the company said its second-quarter profit slipped 34 percent on stock compensation expenses.
Shares in Red Hat, the largest distributor of the open source Linux operating system, dropped to $19.89 in early trading Wednesday on the Nasdaq Stock Market, off $6.43, or 24 percent, from Tuesday's close. Red Hat shares had dropped in after-hours trading, and the stock opened at $20.89. It has traded in a 52-week range of $16.29 to $32.48.
The Raleigh-based company reported Tuesday that quarterly net income fell to $12 million, or 5 cents per share, from $18.1 million, or 9 cents per share, in the year-ago period. Red Hat said one-time costs, including $8.3 million in stock compensation, drained profits.
Excluding the stock-based compensation and other items, Red Hat said it earned 11 cents per share in the quarter ending Aug. 31. Revenue grew 52 percent to $99.7 million from $65.7 million in the prior-year quarter.
Analysts polled by Thomson Financial had expected a profit of 10 cents per share on sales of $97.1 million.
It was the 18th consecutive quarter of sequential revenue growth for Red Hat.