This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Closer Look Cuts Down Red Hat

Although Red Hat's (RHT - Get Report) first-quarter results were on target Wednesday, investors evidently didn't like what they saw under the hood.

Shares were recently off $1.31, or 5.4%, to $22.88 on heavy volume Thursday afternoon.

In a research note published Thursday, Goldman Sachs analyst Sarah Friar pointed to decelerating billing, lower deferred revenue than in prior quarters and cash flow from operations down 4% year over year as troubling signs.

She questioned whether the Raleigh, N.C.-based Linux software maker will convince the market it can provide IT infrastructure beyond the operating system. Red Hat is an investment banking client of Goldman, which makes a market in the stock.

On a conference call late Wednesday, Red Hat President Charlie Peters attempted to explain away lower growth in deferred revenue. "When revenue accelerates very rapidly, it makes deferred revenue growth look smaller."

He said billings were $143 million. "Don't get too concerned about quarterly billings and revenue," Peters said.

Cash flow from operations, excluding items, was $52 million, down $2 million year on year.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
RHT $76.83 -0.03%
AAPL $130.28 0.47%
FB $81.53 -1.07%
GOOG $565.06 3.30%
TSLA $218.42 -0.08%

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs