Linux company Red Hat announced yesterday a strong growth in both turnover and profit, well in excess of what analysts had expected. When the numbers were known, popped the stock price up 12 percent.
Quarter until 31 August - fiscal year's second - gave a turnover of 183.6 million U.S. dollars and a net profit of 28.9 million U.S. dollars, respectively 12 percent and 37 percent more than the same quarter last year. Analysts had expected a turnover of just under 180 million U.S. dollars.
Subscription to Red Hat sales increased by 15 percent and now account for 85 percent of the company's turnover. The average duration of contracts has increased to 22 months from 19 months in the previous quarter. All the company's 25 largest customers have renewed and extended their agreements. Of the top 300 that would renew in the second quarter, there were only three that failed, and two of these should have turn to Red Hat after the end.
In the current quarter, the company says that they believe in a turnover between 187 million and 189 million, is nearly 14 growth from the third quarter last year.
According to CEO Jim White Hurst Red hat take customer from Red Hat's long-term clients from both Microsoft and Sun.
Analyst Sarah Friar of Goldman Sachs told Bloomberg News that Red Hat is likely to benefit from the uncertainty surrounding the future of the Sun, that Oracle wants to buy for 7.4 billion U.S. dollars. The European Commission has not yet approved the purchase.
White Hurst says that the uncertainty surrounding the Sun get potential customers to study the options, and that Red Hat profit from it.
The growth of Red Hat indicates that the company does not suffer particularly from rival Novell (Suse Linux) cooperation with Microsoft. We refer to a case where a "large finance company" (which will be Credit Suisse) could be lured over to Suse to earn free subscriptions through Microsoft, but he recently returned to Red Hat because it gave them greater profit.
Oracle's campaign to hijack Red Hat customers by offering cheaper subscriptions also seems to have had little effect.
By quarter results published earlier this year, according to that Red Hat has consistently maintained double-digit percentage growth in sales, seemingly unperturbed by the crisis.
