Red Hat boasts quarterly profit

Linux software maker Red Hat achieved its first quarterly profit in the third quarter of its 2003 financial year ending 30...

Linux software maker Red Hat achieved its first quarterly profit in the third quarter of its 2003 financial year ending 30 November, boosted by growing sales of its enterprise server operating system.

Net income was $305,000 (£191,000), with earnings per share breaking even, based on US accounting principles. For the same period last year, Red Hat reported a loss of $15.1m. Revenue for the just-ended quarter totalled $24.3m, compared with about $20m a year ago.

Enterprise revenue, which does not include the company's embedded software business, accounted for 93% of Red Hat's total revenue. Contributing to the nearly 50% year-on-year growth in its enterprise business was Red Hat Linux Advanced Server, its enterprise server operating system, which acquired 12,000 new customers during the quarter. Red Hat said those new subscribers helped more than double its customer base for that product.

During the quarter Red Hat delivered its first 64-bit workstation operating system, which shipped on workstations from Hewlett-Packard. Although it did not comment on the success of the product during the third quarter, Red Hat predicted that sales of those workstations would exceed 2,000 units in this quarter.

Red Hat hoped its partnerships with major vendors such as IBM and Oracle will help boost future interest in its operating system products. Oracle has tuned a version of its database clustering software to run on Red Hat's Advanced Server operating system.

The company expected sequential revenue growth to be driven by its enterprise sales and services business. Revenue is pegged to come in between $26.5m and $27.5m, representing growth of between 9% to 13% over the third quarter

Red Hat expected to continue operating in the black with net income in the fourth quarter of between $1.3m and $2.5m.



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