Updated from 4:41 p.m. EST
SAN FRANCISCO -
third-quarter earnings squeaked past the Street's estimates Thursday, as the company also named a new chief executive.
The Raleigh, N.C., open-source software developer said revenue was $135.4 million, up 28%, from a top line of $105.8 million in the same quarter of 2006. The consensus estimate of analysts polled by Thomson Financial was for revenue of $132.4 million.
Net income for the quarter was $20.3 million, or 10 cents a share, up 39% over the prior year, when the company earned $14.6 million, or 7 cents.
Excluding items, EPS was 19 cents, a penny better than analysts' estimates.
Deferred revenue grew 36% year over year, to $422.6 million, according to the company.
Shares of Red Hat closed Thursday up 2.9% to $18.79.
Effective Jan. 1, James M. Whitehurst will succeed Matthew Szulik as president and CEO, the board announced. Whitehurst is the former chief operating officer of
Szulik, who will continue as chairman, said he was stepping aside as CEO to spend more time with his family, which is "challenged by serious health issues."
For the fourth quarter, CFO Charles Peters said revenue would range from $139.5 million to $141.5 million and EPS, excluding items, will be 19 cents. Analysts were expecting a top line of $139.5 million and EPS, less items, of 20 cents.
Excluding items, operating margin was 21.4%, up one-half percentage point year over year.
Red Hat's 28% top-line growth in the third quarter was broad-based, Peters said. While the company did three deals exceeding $5 million in the comparable quarter of 2006, it had none of that size during the quarter just ended. Instead, the software developer closed a record number of deals exceeding $1 million each.
And the top 25 renewals were for 128% of the value of contracts they replaced, Szulik said. "The pipeline going into Q4 is excellent" for its JBoss middleware line, he said.
The company opened its first office in Taiwan and expanded staffing in all regions, Peters said.