Updated from 4:56 p.m. ET to add latest share prices, more information on Red Hat and AT&T, and the entry on Bank of America.
NEW YORK (
) -- Shares of
fell in late trades on Monday despite a 2-cent profit beat from the Raleigh, N.C.-based open-source software company in its latest quarter.
After the close, Red Hat posted non-GAAP earnings of $55.7 million, or 28 cents a share, on revenue of $290 million for the three months ended Nov. 30. The average estimate of analysts polled by
was for a profit of 26 cents a share on revenue of $289.6 million in the quarter.
The in-line revenue performance looks disappointing though given that Red Hat had come in at least $10 million above consensus in the previous two quarters.
"We continued to deliver consistent performance across our business which resulted in strong growth in our key financial metrics. At the same time, we continued to invest in strategic growth initiatives," said Charlie Peters, the company's chief financial officer, in a statement. "When compared to the first three quarters of last fiscal year, our year-to-date revenue, non-GAAP operating income and operating cash flow are up 26%, 35% and 35%, respectively."
On its conference call, the company said it expects earnings of 26 to 27 cents a share with revenue ranging from $289 million to $292 million for its fiscal fourth quarter ending in February. Wall Street's current consensus view is for a profit of 26 cents a share in the quarter on revenue of $292.5 million in the period.
For its full fiscal year, Red Hat now sees earnings of $1.07-$1.08 per share. The average analysts' view sits at a profit of $1.05 a share.
Shares were last quoted at $42.81, down 7%, on volume of around 800,000. The stock is flat in the past year but had already declined 14% based on Monday's regular session close at $46.05 since hitting a 52-week high of $53.42 on Nov.16.
slumped in the extended session after the Dow component said it's dropping its bid to acquire
The transaction, which valued T-Mobile at $39 billion, was sidelined by the anti-trust concerns of U.S. regulators, who argued the combination would lead to less choice and higher prices for consumers.
As a results of scrapping the deal, AT&T said it expects to record a pre-tax charge of $4 billion in its fiscal fourth quarter to reflect a break-up fee being paid to
, the parent company of T-Mobile.
AT&T also said it's entering a "mutually beneficial" roaming agreement with Deutsche Telekom but didn't provide further details on terms.
The company criticized regulators in its press release announcing the decision.
"The actions by the Federal Communications Commission and the Department of Justice to block this transaction do not change the realities of the U.S. wireless industry," AT&T said. "It is one of the most fiercely competitive industries in the world, with a mounting need for more spectrum that has not diminished and must be addressed immediately. The AT&T and T-Mobile USA combination would have offered an interim solution to this spectrum shortage. In the absence of such steps, customers will be harmed and needed investment will be stifled."
AT&T shares were last quoted at $28.67, down 7 cents, on volume of more than 850,000, according to
S&P Capital IQ maintained its strong buy on AT&T following the news, and said the "mutually beneficial" roaming agreement that the company entered with T-Mobile is a positive and could "alleviate some of the needed spectrum."
"While the breakup fee and resources tied to the deal is unfortunate, we believe T's strong 6M smartphone sales in October and November is sign of execution," S&P Capital IQ said. "We expect capex to remain focused on wireless, but remain manageable. We still see T as undervalued and supported by recent dividend hike."
AT&T announced a 2%-plus boost to its dividend on Friday, and the stock's forward annual yield sits about 6%.
The news boosted shares of a number of other telcos in late action, including
, a wireless broadband company, whose stock was up more than 6% to $2.16 on volume of nearly 400,000;
, whose shares rose 5.5% to $2.28 on volume of 1.3 million; and
, which edged up 8 cents to $38.71 on volume of more than 400,000.
Bank of America
The other bit of drama in the extended session was provided by
Bank of America
, down more than 4%, making it the biggest percentage decliner in the
Dow Jones Industrial Average
The selling pressure was in part a product of the rising fears about Europe's stability, but the proximity of Bank of America's share price to $5 was also a factor as many fund managers aren't able to invest in stocks that drop below that threshold. Monday's finish was the stock's worst since March 2009 when the markets were still in the throes of the financial crisis.
Bank of America's stock edged up to $5.01 in after-hours action with 8.6 million shares changing hands, according to
. The shares dipped as low as $4.92 in the regular session. A majority of the sell side is bearish on the bank with 18 of the 32 analysts rating the stock at either hold (17) or underfperform (1).
Written by Michael Baron in New York.
>To contact the writer of this article, click here:
>To submit a news tip, send an email to:
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.