Categories AlphaGraphs, Earnings, LATEST, Technology

Red Hat posts strong quarterly and full-year revenues

Red Hat reported solid growth in total revenues and subscription revenues for Q4 2018 and full year 2018. Quarterly results beat analyst expectations and sent the stock climbing upwards during the pre-market session today. The growth in total revenues for the quarter was driven by cloud products.

The Linux distributor incurred a one-time charge related to the tax reform, which resulted in a loss for the fourth quarter. Excluding this charge, EPS was $0.91, ahead of market expectations.

New products like Ansible and OpenShift fuelled Red Hat’s revenue growth as the company shifts more towards hybrid and other cloud-based products. Sales growth of application development products was almost triple that of infrastructure products.

During the quarter, Red Hat acquired CoreOS, a container services provider, for $250 million. Red Hat believes there is growing opportunity in the container area and expects this deal to be a successful one in terms of strategic fit and payoff.

Transformation in the digital sector has become a necessity and Red Hat believes that customers prefer companies that can give the infrastructure, scale, and flexibility to make this process as smooth as possible.

Over the past weeks, several speculations have emerged over Red Hat being a potential acquisition target for Google. The theory is that Google could be interested in picking up Red Hat for its growing clout in the cloud business, and if Google makes a move, there is a chance that Amazon or Microsoft would come forth with their own proposals as well.

However, if at all Google is looking at such a deal, it will not come at a small cost. The price will be very heavy because firstly, Red Hat is not a small player. It has a good industry position and market value. Secondly, the company is doing well right now in the cloud arena and it envisages further growth opportunities on the horizon as seen from its recent CoreOS acquisition. So, there is really no reason it would want to be acquired.

Also Read:  Earnings preview: Here’s why Lululemon (LULU) might gain further ahead of Q3 report
Red Hat Q4 2018 earnings results
Red Hat Q4 2018 Earnings Infographic

Even then, if such a scenario were to arise, it would a very interesting one to watch.

Most Popular

Salesforce (CRM) Q1 2021 earning infographic

Salesforce (NYSE: CRM) reported first-quarter earnings results for fiscal 2021 after the regular trading hours on Thursday. The results were better than analysts' projections. Meanwhile, the stock fell over 3%

A visual dashboard of Nordstrom (JWN) Q1 2020 earnings results

Nordstrom (NYSE: JWN) swung to a loss in the first quarter of 2020 hurt by the COVID-19 related charges. The fashion retailer reported a loss of $3.33 per share compared

A visual representation of Ulta Beauty (ULTA) Q1 2020 earnings results

Ulta Beauty Inc. (NASDAQ: ULTA) reported its financial results for the quarter ended May 2, 2020, on Thursday after the market closes. The results missed analysts' expectations. The company slipped

Tags

Top