=Red Hat (RHT) to be acquired by IBM (IBM) for $190.00/share

Red Hat to be acquired by IBM (IBM) for $190.00/share in cash, or approximately $34 bln 
The acquisition of Red Hat reinforces IBM's high-value model. It will accelerate IBM's revenue growth, gross margin and free cash flow within 12 months of closing. It also will support a solid and growing dividend. The company will continue with a disciplined financial policy and is committed to maintaining strong investment grade credit ratings. The company will target a leverage profile consistent with a mid to high single A credit rating. The company intends to suspend its share repurchase program in 2020 and 2021. The company intends to close the transaction through a combination of cash and debt. The acquisition has been approved by the boards of directors of both IBM and Red Hat. It is expected to close in the latter half of 2019.

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HYBRID CLOUD

Rometty told Reuters on Sunday that the increasing use of cloud services from multiple providers was the driving force behind the deal along with the rise of the so-called hybrid cloud, in which companies run some of their software in their own data centers and other elements of it in data centers run by IBM, Amazon Web Services or Google Cloud, among others.

Red Hat has been investing heavily in tech tools such as so-called "containers," which make it easier for businesses to split up their computing work among a mix of data centers.

"They want choice and we are going to give it to them," Rometty said. "Multi-cloud is a fact of life."

In buying Red Hat, IBM will have assembled a cloud that includes physical servers, its own operating system and applications like human resources software.

But the combined entity will also sell software that runs on its customers own hardware and other clouds. That will put it in direct competition with firms like Microsoft, which has a similar mix of software and cloud services.

"We are going to both compete and partner with those other clouds," Rometty said. "The thing about IBM is, we've been around long enough to know this is a multi-cloud world."

Jim Whitehurst, the CEO of Red Hat, said the use of multiple clouds has been an advantage for Red Hat.

Cloud providers such as Amazon often offer a house-made version of the Linux operating system for free or at little cost. But that version of Linux is available only on Amazon, and if the business wants to run software on another cloud they would have to ensure it works with a different version of Linux there.

Red Hat offers a standard version of Linux that runs on commonly available clouds as well as a business's own data centers, and Whitehurst said Red Hat customers were increasingly running its operating system on public clouds.

"We are growing faster on the public clouds than the public clouds are growing," Whitehurst said in an interview. "Yeah, you pay us a little extra versus a free cloud offering, but you get the benefit of a standard operating environment."

=Red Hat (RHT) reported earnings on Wed 19 Sept 18 (a/h)

Red Hat beats by $0.03, reports revs in-line; guides NovQ EPS below consensus, revs below consensus; guides FY19 EPS in-line, revs in-line 

• Reports Q2 (Aug) earnings of $0.85 per share, excluding non-recurring items, $0.03 better than the S&P Capital IQ Consensus of $0.82 and above prior guidance of approx $0.81; revenues rose 13.7% year/year to $822.75 mln vs the $828.12 mln S&P Capital IQ Consensus and vs prior guidance of $822-830 mln.
  • Biilings were $789 mln.
  • Subscription revenue rose 13% to $723 mln. Breaking this down a bit, subscription revenue from Infrastructure-related offerings rose 8% YoY to $527 mln. Subscription revenue from Application Development-related and other emerging technology offerings rose 31% YoY to $196 mln.
  • Non-GAAP operating margin declined to 23.9% from 26.4% last year, but this was above prior guidance of approx 23%.
• Co issues downside guidance for Q3 (Nov), sees EPS of approx $0.87, excluding non-recurring items, vs. $0.92 S&P Capital IQ Consensus; sees Q3 revs of $848-856 mln vs. $862.1 mln S&P Capital IQ Consensus. Guides to NovQ non-GAAP operating margin of approx 24%.
• Co issues in-line guidance for FY19, sees EPS of $3.45-3.49, excluding non-recurring items, vs. $3.45 S&P Capital IQ Consensus and vs prior guidance of $3.44-3.48; sees FY19 revs of $3.360-3.395 bln  vs. $3.39 bln S&P Capital IQ Consensus and bs prior guidance of $3.375-3.410 bln. Reaffirms full year non-GAAP operating margin of approx 23.9%.

Earnings expected this week : Sept 17 - 21, 18 (wk 38)

Earnings confirmed for this week

Monday (Sept 17) 

• Morning: None
• Afternoon: FDX  ORCL

Tuesday (Sept 18)

• Morning: APOG AZO CBRL GIS 
• Afternoon: None

Wednesday (Sept 19)

• Morning: CPRT
• Afternoon: MLHR  RHT

Thursday (Sept 20)

• Morning: DRI   THO
• Afternoon: MU  SCS  UNFI

Friday (Sept 21)

• Morning: None

=Red Hat (RHT) reported earnings on Thur 21 June 18 (a/h)

Red Hat beats by $0.04, reports revs in-line; guides AugQ EPS and revs below consensus; guides FY19 EPS above consensus, revs below consensus; announces new $1 bln stock repurchase plan 

• Reports Q1 (May) earnings of $0.72 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus of $0.68 and above prior guidance of approx $0.68; revenues rose 20.2% year/year to $813.53 mln vs the $807.48 mln Capital IQ Consensus and vs prior guidance of $800-810 mln.
  • Red Hat Q1 billings $709 mln vs. ~$725 mln estimates; non-GAAP operating margin came in at 20.7% vs prior guidance of approx 20.5%.
• Co issues downside guidance for Q2 (Aug), sees EPS of $0.81, excluding non-recurring items, vs. $0.89 Capital IQ Consensus Estimate; sees Q2 revs of $822-830 mln vs. $854.74 mln Capital IQ Consensus Estimate.
• Co issues mixed guidance for FY19, sees EPS of $3.44-3.48, excluding non-recurring items, vs. $3.43 Capital IQ Consensus Estimate and vs prior guidance of $3.38-3.41; sees FY19 revs of $3.375-3.410 bln vs. $3.45 bln Capital IQ Consensus Estimate and vs prior guidance of $3.425-3.460 bln.
• Stock Repurchase Plan: Co authorizes the repurchase of up to $1 bln of common stock. The new program is to replace the previous $1 bln repurchase program that will expire on June 30, 2018. From its commencement on July 1, 2016 through June 20, 2018, the company repurchased 8.2 mln shares for $751 mln.

=Red Hat (RHT) reported earnings Tue 26 Sept 2017 (b/o)

Red Hat beats by $0.10, beats on revs; guides Q3 EPS in-line, revs above consensus; raises FY18 EPS and revenue above consensus 

• Reports Q2 (Aug) earnings of $0.77 per share, excluding non-recurring items, $0.10 better than the Capital IQ Consensus of $0.67; revenues rose 20.6% year/year to $723.6 mln vs the $699.56 mln Capital IQ Consensus. Subscription revenue for the quarter was $638 million, up 20%. Subscription revenue in the quarter was 88% of total revenue. Subscription revenue from Infrastructure-related offerings for the quarter was $487 million, an increase of 14% in USD year-over-year, and 14% as measured in constant currency. Subscription revenue from Application Development-related and other emerging technology offerings for the quarter was $150 million, an increase of 44% in USD year-over-year, or 43% measured in constant currency.
• Billings $682 mln vs. $660 mln estimates
• Co issues guidance for Q3, sees EPS of $0.70, excluding non-recurring items, vs. $0.70 Capital IQ Consensus Estimate; sees Q3 revs of $730-737 mln vs. $710.50 mln Capital IQ Consensus Estimate.
• Co issues upside guidance for FY18, raises EPS to $2.77-2.89 from $2.66-2.70, excluding non-recurring items, vs. $2.69 Capital IQ Consensus; raises FY18 revs to $2.88-2.895 bln from $2.785-2.825 bln vs. $2.81 bln Capital IQ Consensus.
• "Strong demand for our technologies that enable hybrid cloud computing has contributed to accelerated revenue growth in the first half of the fiscal year.... IT organizations continued to turn to Red Hat as a strategic technology partner to help them transform and modernize their applications and infrastructure for the hybrid cloud."

===Red Hat (RHT) reported earnings on Wed 21 Dec 2016 (a/h)

Red Hat beats by $0.03, misses on revenue and billings; guides Q4 EPS in-line, revs below consensus; CFO Frank Calderoni is leaving to be CEO of another company; VP Eric Shander named interim CFO  :

• Reports Q3 (Nov) earnings of $0.61 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.58; revenues rose 17.5% year/year to $615.3 mln vs the $618.46 mln Capital IQ. Subscription revenue for the quarter was $543 million, up 19% in U.S. dollars year-over-year, or 18% measured in constant currency. Subscription revenue in the quarter was 88% of total revenue.
• Billings $679 mln vs estimates near $700 mln.
• Co issues guidance for Q4, sees EPS of ~$0.61, excluding non-recurring items, vs. $0.61 Capital IQ Consensus; sees Q4 revs of $614-622 mln vs. $638.17 mln Capital IQ Consensus Estimate.  
• Frank Calderoni notified Red Hat of his decision to step down as Executive Vice President, Operations and Chief Financial Officer of Red Hat, effective in late January 2017, to enable him to accept a chief executive officer position at another company. Mr. Calderoni has indicated that he would make himself available to Red Hat after the effective date of the resignation for transitional support, as needed.
• Jim Whitehurst, President and CEO, after consulting with the Board of Directors of Red Hat, announced that upon Mr. Calderoni's resignation in January, Red Hat intends to appoint Eric Shander, Vice President, Finance and Accounting and our principal accounting officer, to act as the CFO of Red Hat, pending a decision on a permanent replacement.

Red Hat (RHT) reported earnings on Tue 22 March 2016 (a/h)

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Red Hat beats by $0.05, beats on revs; issues in-line/upside guidance but billings disappoint :

• Reports Q4 (Feb) earnings of $0.52 per share, $0.05 better than the Capital IQ Consensus of $0.47; revenues rose 17.3% year/year to $544 mln vs the $537.5 mln Capital IQ Consensus.
  • RHT reports Q4 Billings of $764 mln vs Street Expectations of approx $770 mln.
  • Subscription revenue from Infrastructure-related offerings for the quarter was $391 million, an increase of 15% in U.S. dollars year-over-year and 18% measured in constant currency. Subscription revenue from Application Development-related and other emerging technologies offerings for the quarter was $89 million, an increase of 38% in U.S. dollars year-over-year and 43% measured in constant currency.
• Co issues guidance for Q1, sees EPS of $0.50, excluding non-recurring items, vs. $0.50 Capital IQ Consensus Estimate; sees Q1 revs of $558-566 vs. $553.81 mln Capital IQ Consensus Estimate.
• Co issues upside guidance for FY17, sees EPS of $2.22-2.26, excluding non-recurring items, vs. $2.18 Capital IQ Consensus Estimate; sees FY17 revs of $2.38-2.42 bln vs. $2.36 bln Capital IQ Consensus Estimate. 

Red Hat (RHT) reported earnings on Thur 17 Dec 2015 (a/h)

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Red Hat beats by $0.02, reports revs in-line; guides Q4 EPS ~in-line, revs above consensus :

• Reports Q3 (Nov) earnings of $0.48 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus of $0.46; revenues rose 14.8% year/year to $523.6 mln (+21% ex-FX) vs the $521.45 mln Capital IQ Consensus. 
  • Subscription revenue from Infrastructure-related offerings for the quarter was $373 million, an increase of 12% in U.S. dollars year-over-year and 18% measured in constant currency. Subscription revenue from Application Development-related and other emerging technologies offerings for the quarter was $84 million, an increase of 37% in U.S. dollars year-over-year and 45% measured in constant currency.
• Billings $620 mln vs. ests of ~$588 mln
• Co issues guidance for Q4, sees EPS of $0.47, excluding non-recurring items, vs. $0.48 Capital IQ Consensus; sees Q4 revs of $535-539 mln vs. $533.16 mln Capital IQ Consensus.

Options trade idea : Red Hat (RHT) (11/14)

• RHT earnings Dec 15, 2014 (Mon) after close
• buy Dec $65 call   $1.35; sell  Dec $70 call  $0.30

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Red Hat (RHT) announced financial results Thursday for its fiscal year 2015 third quarter ended November 30, 2014. Total revenue for the quarter was $456 million, above estimates of $451.39 million and an increase of 15 percent in U.S. dollars from the year ago quarter, and 18 percent measured in constant currency.

Red Hat Inc. (RHT) earnings on Wed 6/20/12

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Red Hat Inc. (RHT)  fiscal first-quarter earnings rose 15% as the business-software provider reported better-than-expected revenue growth, though operating costs were sharply higher.

However, shares fell nearly 12% to $50 in after-hours trading. Through Wednesday's close, the stock is up roughly 37% this year.

The provider of open-source software products has posted stronger earnings for seven straight quarters as businesses' growing appetites for cloud computing had helped drive demand for the company's products.