Red Hat shares jump on the strong profit-abc27

SAN JOSE, California (AP)-Red Hat Inc. shares jumped more than 10 percent Wednesday after the software is December-February results came in stronger than expected, helped by companies zeal to adopt "cloud computing" technologies.

Net income in Red Hat's fiscal fourth quarter, which ended February 28, rose by 43 percent. Red Hat earned $ 33.5 million, or 17 cents per share, versus $ 23.4 million, or 12 cents per share, in the previous year.

Excluding items, profit was 26 cents per share, for the 22 cents per share that analysts polled by FactSet expected.

Turnover rose by 25 percent to 244.8 million dollars, topping forecasts for $ 235.9 million.

"Cloud computing" refers to services that will be streamed via the Internet, instead of requiring software directly on a desktop or laptop computer. Jim Whitehurst, Red Hat's CEO, said the company is on track to reach 1 billion dollars in revenue in the fiscal year, helped by that trend.

For all of Red Hat's most recent fiscal year net income jumped from the company's 23 percent to $ 107.3 million, while turnover rose by 22 percent to 909.3 million dollars. Analysts expect Red Hat hit 1.03 billion dollars in the current fiscal year.

"We believe that the strong demand we experience was largely driven by customers that their data centers to modernise and prepare their infrastructure for cloud computing," Whitehurst said in a statement.

Information technology spending is on the rise as companies spend more freely after clamping down during the great recession. But Japanese earthquake and tsunami raised fears about companies like Red Hat that a large amount of business in that country. Regulatory filings, has Red Hat Japan described as the only country, besides the United States, that is individually material to the results. Red Hat makes still, most of the money from u.s. customers.

Red Hat is specialized in "open source" software, which technically is free because the source code is freely distributed on the Internet, but what companies like Red Hat are able to benefit from the sale of licenses that include support services.

Despite fears about Japan rebounded Red Hat's stock, which is already in the past month had dropped sharply Wednesday on the higher-than-expected results.

$ 4.03 Rose shares up $ 44 in extended trading, after the results were reported. She was rose 41 cents, or 1 percent, to $ 39.97 at the end of the regular session.

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