Red Hat earnings shrug off Oracle threat

Red Hat's net income subsided in its most recent quarter, but revenue increased as the Linux seller shrugged off the arrival of Oracle as a direct competitor.

For the quarter ended November 30, the company's net income was $15.5 million, down 37 percent compared with the same period a year ago. But its revenue increased 45 percent to $105.8 million. The net income of 14 cents per share, excluding various charges like stock option expenses, beat the average expectation of 12 cents per share predicted by analysts surveyed by First Call.

"Revenue, earnings and cash flow all exceeded our expectations," said Red Hat Chief Executive Matthew Szulik in a conference call. Factoring in expenses--including $8.5 million in stock option expenses--the company's net income was 7 cents per share.

"It looks like the world is not coming to an end for you guys after all," said Merrill Lynch analyst Kash Rangan shortly afterward.

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