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Red Hat Drops

Costs related to Gluster, RH's bought-in storage product, increased expenses, as did two small acquisitions

Red Hat, still feeding for the moment off the shift from Unix to Linux, fell better than 4.8% evening out at $55.90 after-hours Monday when it said its fiscal Q2 earnings were down year-on-year because of investments and acquisition-related expenses.

It cleared 28 cents a share, when 29 cents was expected, although sales were up 15% to $322.6 million.

Subscription revenue was up 17% to $279 million. Billings grew 15% lagging the 16% reported in Q1. It did $43.8 million on training and other services, up 1.8%.

Red Hat said costs related to Gluster, its bought-in storage product, increased expenses, as did two small acquisitions.


Red Hat CTO Brian Stevens keynoting at 2nd International Cloud Expo in 2008

Operating expenses were $224.7 million, up more than 23%. The acquisitions reduced EPS by a penny.

Deferred revenue was up 25% to $813 million.

Red Hat said its fiscal Q3 revenue would be between$336 million and $339 million, with earnings per share of 28 cents to 29 cents. It was supposed to do 30 cents on$340.1 million. It foresees full-year revenue of $1.32 billion to $1.33 billion, with an EPS of $1.15 to $1.17, a bit lower than consensus of $340 million and 30 cents this quarter and $1.33 billion and $1.19 a share for the full year.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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