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Red Hat Plunges as Billings Miss, Guidance Weak (Update 1)

Updated from 4:24 p.m. EST to provide billings information in the third paragraph, guidance from the conference call and updated share price.

NEW YORK ( TheStreet) -- Software maker Red Hat (RHT - Get Report) continued its strong earnings trend, cruising past first-quarter estimates after Wednesday's closing bell, but weak billings and second-quarter guidance sent shares sharply lower.

The open source software provider reported a non-GAAP profit of $58 million, or 30 cents a share, on revenue of $315 million for the three months ended May 31. Analysts polled by Thomson Reuters were looking for earnings of 27 cents per share on $310.77 million in revenue.

Red Hat reported its first-quarter results after market close.

Billings missed Wall Street estimates, said Mizuho Securities analyst Abhey Lamba. Billings, defined as revenues plus change in deferred revenue, came in at $310 million. Wall Street was expecting $319 million. Lamba rates shares "buy."

Subscription revenue totaled $272.6 million for the quarter, up 21% year-over-year. The company has now beat the consensus estimate for its earnings in at least nine straight quarters. The

"Our first quarter results represented a strong start to our fiscal 2013. Red Hat's compelling value proposition and innovative, open source technologies continued to drive our financial success and market share gains," President and CEO Jim Whitehurst said in the press release.

On the earnings call, Red Hat provided second-quarter guidance slightly weaker than what Wall Street was looking for. The Raleigh, N.C.-based company said it expects to earn 28 cents to 29 cents per share on $320 million to $322 million in revenue. Analysts polled by Thomson Reuters expect Red Hat to earn 29 cents per share on $330.83 million in revenue.

Shares of Red Hat closed Wednesday's regular session lower, off 0.74% at $56.50. The stock plunged in the extended session, falling $6.30, or 11.15%, to $50.20.

Interested in more on Red Hat? See TheStreet Ratings' report card for this stock.

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-- Written by Chris Ciaccia in New York

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