Shares of Red Hat Inc., the largest seller of the open-source Linux operating system, dropped in late trading after second-quarter profit missed analysts’ estimates and the company pared sales forecasts on weak demand for services.
The shares of Raleigh, North Carolina-based Red Hat fell as much as 4.8 percent. Excluding some items, profit in the quarter that ended Aug. 31 was 28 cents a share, less than the 29-cent average projection compiled by Bloomberg. Sales were $322.6 million, the company said today in a statement, compared with the $321.7 million analysts estimated.
For the third quarter, profit will be 28 cents to 29 cents a share on sales of $336 million to $339 million, Red Hat said on a conference call. Analysts on average had predicted profit of 30 cents and sales of $339.7 million. For the fiscal year, Red Hat narrowed its revenue forecast to $1.32 billion to $1.33 billion, from the $1.32 billion to $1.34 billion projection the company gave in June.
Red Hat cited a slowdown in the services side of its business for the lower forecast. Demand for subscriptions to its software remains strong, Chief Executive Officer Jim Whitehurst said on the conference call.
Red Hat shares fell as low as $54.77 in extended trading after the earnings report and forecast. They had declined less than 1 percent to $57.54 at the close in New York. The stock has jumped 39 percent this year.
© Copyright 2015 Bloomberg News. All rights reserved.