Red Hat Inc (NYSE: RHT) stock fell over 13.7% in the pre market session on June 22nd, 2018 after the company issued lower-than-expected guidance for the second quarter of the FY 19 due to a strengthening dollar. Though the company in the current quarter has beaten the analysts’ expectations for the first quarter 2019. RHT has reported the non-GAAP net income for the quarter of $133 million, as compared to $104 million, in the year-ago quarter.
RHT in the first quarter of FY 19 has reported the adjusted earnings per share of 72 cents, beating the analysts’ estimates for the adjusted earnings per share of 68 cents according to analysts surveyed by FactSet. The company had reported the adjusted revenue growth of 20 percent to $813.5 million in the first quarter of FY 19, beating the analysts’ estimates for revenue of $807.5 million. Subscription revenue for the first quarter is of $712 million, which is a rise of 19% in USD year-over-year, or 16% measured in constant currency
Moreover, RHT has posted the operating cash flow of $346 million for the first quarter, which is an increase of 34% on a year-over-year basis. Total cash, cash equivalents and investments as of May 31, 2018 is of $2.5 billion.
Meanwhile, RHT has authorized the repurchase of up to $1 billion of the company’s common stock. This new program will replace the previous $1 billion repurchase program that will expire on June 30th, 2018. From its commencement on July 1, 2016 through June 20, 2018, RHT has repurchased approximately 8.2 million shares of its common stock for $751 million under the previous program.
Additionally, for the second quarter 2018, RHT expects revenue to be approximately $822 to $830 million in USD. The non-GAAP operating margin is expected to be approximately 23.0% for Q2 2018. The company expects diluted non-GAAP earnings per share to be approximately $0.81, assuming 185 million diluted shares outstanding. Both GAAP and non-GAAP EPS assume a $4 million forecast for other income and an estimated annual effective tax rate of 22.5% before discrete tax items. For the second quarter, analysts expects adjusted earnings of 89 cents a share and revenue of $855 million.
For FY 19, RHT expects revenue to be approximately $3.375 billion to $3.410 billion in USD. The non-GAAP operating margin is expected to be approximately 23.9%. Diluted non-GAAP earnings per share is expected to be approximately $3.44 to $3.48, assuming 185 million diluted shares outstanding. The Operating cash flow is expected to be approximately $1.035 billion to $1.045 billion for FY 19.