Red Hat was unable to meet analysts’ expectations when presenting its quarterly results. As a result, the value of the company’s shares fell by 7 percent.
Red Hat turned in the second quarter of this year’s sales of $ 823 million. However, the expectations are lower and higher. Analysts assumed a turnover of $829 million. However, turnover increased by 14 percent compared to the previous year, says Silicon Angle.
Subscriptions, including the Red Hat Enterprise Linux operating system (RHEL), increased 13 percent to $722.7 million. That was less than the $724.1 million analysts had expected.
According to CFO Eric Shander, this is due in part to the modification of a contract with the US Army and another “big loss” to an unknown software provider. Shander went on to say that he thinks that the decline in the growth of renewed RHEL subscriptions is now coming to an end.
The training and service objectives were also not achieved. The company was expected to generate 104 million dollars in sales with these departments, but in reality this amounted to 100 million dollars. However, the turnover from software container technologies increased by 31 percent to 196 million dollars.
The outlook for the third quarter of this year is less than expected. Red Hat says it expects a profit of 87 cents per share and a turnover of between 848 and 856 million dollars. Analysts were hoping for 92 cents per share and a turnover of 862 million dollars.
According to Pund-IT analyst Charles King, the decline in the value of the company’s shares after the presentation of quarterly figures is a “fairly common situation”.
“This quarter’s results were less than a percentage point below analysts’ expectations. The company has exceeded expectations for the last four quarters in a row, placing more value on the situation than it could possibly have deserved. In addition, Red Hat was cautious in announcing that it is not going to live up to its expectations for the current quarter either.”This news article was automatically translated from Dutch to give Techzine.eu a head start. All news articles after September 1, 2019 are written in native English and NOT translated. All our background stories are written in native English as well. For more information read our launch article.