NEW YORK (TheStreet) -- Red Hat (RHT) - Get Report stock is declining 6.47% to $74.59 in after-hours trading on Wednesday after the company agreed to acquire 3scale, an application programming interface management technology provider, for an undisclosed amount. The deal is expected to close this month.

Red Hat said the deal will have no material impact on revenue for the fiscal 2017 second quarter ending August 31, but non-GAAP operating expenses will increase by $1.5 million, or 1 cent per share. For the full fiscal year, non-GAAP operating expenses are expected to rise by $5 million, or 3 cents per share.

Additionally, the Raleigh, NC-based open source solutions provider reported mixed financial results for the fiscal 2017 first quarter.

Red Hat reported earnings of 50 cents per share for the quarter ended May 31, in line with Wall Street projections.

Revenue increased 18% year over year to $567.9 million, beating estimates of $562.76 million for the latest quarter.

Separately, Red Hat has a "buy" rating and a letter grade of B at TheStreet Ratings because of the company's revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, growth in earnings per share and increase in net income.

You can view the full analysis from the report here: RHT

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.

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