Red Hat Inc(NYSE: RHT) has reported the adjusted earnings per share of 61 cents in the third quarter of FY17 against 48 cents in the corresponding period last year, beating the analysts’ consensus expectation of 58 cents. However, the revenue in the third quarter grew 18% to $615.3 billion from last year, failing to meet analysts’ consensus expectation of $618.5 billion. The non-GAAP net income for the third quarter grew to $111 million from $89 million in the corresponding period FY 16. The operating income for the third quarter of FY 17 grew 16% to $143 million.
Total subscription revenue grew 19% to $543 million year-over-year in third quarter of FY 17 while application development related and other emerging technology revenue grew 33% to $112 million year-over-year. However, the operating cash flow fell 8% to $136 million and the total cash, cash equivalents and investments as of November 30th, 2016 is $2.0 billion in the third quarter of FY 17
RHT has repurchased about 1.6 million shares totaling $125 million in the third quarter of FY 17. The remaining balance in the current repurchase authorization as of November 30th, 2016 is over $775 million.
Meanwhile, RHT has provided the guidance for the fourth quarter and the FY 17 after considering the current foreign currency exchange rates that have weakened since the outlook provided on September, 2016. RHT expects the revenue to be in the range of $614 million to $622 million for the fourth quarter of FY 17, also below the analysts’ expectation of $638.4 million. Adjusted earnings per share are expected to be $0.61.
For the FY 17, RHT expects the adjusted earnings per share to be $2.27, and the revenue is expected to be in a range of $2.397 billion to $2.405 billion. The non-GAAP operating margin is expected to be approximately 23.0% and the Operating cash flow is expected to be in the range of approximately $770 million to $785 million.
On the other hand, RHT has announced that Frank Calderoni will step down as executive vice president, operations, and chief financial officer in late January 2017. Moreover, RHT plans to name Eric Shander as an interim CFO, pending a decision on a permanent replacement.
RHT stock has already fallen over 12.6% on December 22nd, 2016 (as of 10:41AM EST; Source: Google Finance).