Earnings Preview: Red Hat poised to deliver earnings growth for Q2

Red Hat Inc. (RHT) is scheduled to report second quarter 2019 earnings on September 19 after the market hours. The market appears to be optimistic about Red Hat’s potential to achieve revenue and earnings growth for the recently ended quarter.

Analysts expect the company to deliver revenues of over $825 million, which would reflect a year-over-year growth of over 14%. The market expects EPS to come in at $0.81, which would be a 5% growth year-over-year.

For the first quarter of 2019, Red Hat beat analysts’ expectations on both revenue and earnings front, which grew 20% and 24%, respectively. The company also posted revenue increases across both its segments.

For the second quarter of 2019, Red Hat guided for revenues in the range of $822 million to $830 million and for adjusted EPS of $0.81. For the full year of 2019, the company guided for $3.3 billion to $3.4 billion and adjusted EPS of $3.44 to $3.48.

The shift to hybrid cloud architecture and the adoption of cloud-enabling technologies have been areas of opportunity for the company. Last quarter, Red Hat entered into partnerships with Juniper Networks (JNPR) and Microsoft (MSFT) for the adoption of cloud technologies.

Red Hat’s industry peer Oracle Corp. (ORCL) reported first quarter 2019 results on Monday in which earnings topped analysts’ expectations but revenues fell short causing the stock to plunge downwards.

So far this year, shares of Red Hat gained 19%. Looking at the past one-month period, the stock is up over 2%. The stock inched up slightly during Tuesday’s morning session.

Red Hat stock plunge on weak guidance; Q1 earnings tops estimates