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Red Hat beats Street
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December 14, 2000: 5:07 p.m. ET
Linux provider bests forecasts with smaller loss, more revenue in 3Q
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NEW YORK (CNNfn) - Red Hat Inc. a leading provider of the Linux operating system, reported slightly better-than-forecast financial results for its third quarter Thursday.
The company had a loss of $900,000, or 1 cent a share, excluding special items in the third quarter, which ended Nov. 30. Analysts surveyed by earnings tracker First Call were looking for a 2 cents-a-share loss in the period, down from the $5.4 million loss, or 4 cents a share, it reported a year earlier.
 Special items excluded include amortization of goodwill and intangibles, stock-based compensation, and merger and acquisition costs. Including those items the company had a net loss of $21.4 million, or 13 cents a share, compared with a net loss of $6.3 million, or 5 cents a share, a year earlier.
Revenue rose to $22.4 million, just above the $22.0 million forecast by First Call and more than double the $10.5 million it reported a year earlier.
Linux is an alternative operating system to Microsoft Corp. (MSFT: Research, Estimates)'s Windows software. Unlike Windows it is an "open-source" system, which means that it is open to modifications by independent developers such as Red Hat and VA Linux Systems Inc. Historically the software had a cult following, but its popularity in the computing mainstream has been growing. On Tuesday computing giant IBM (IBM: Research, Estimates) announced plans to spend $1 billion on Linux next year and to build the world's largest Linux-based supercomputer for the Royal Dutch/Shell oil company using the Red Hat version of Linux.
But even with more legitimacy being given to Linux, its providers like Red Hat and VA Linux have had their problems and have seen their stocks fall steadily in this year's tech stock slide. VA Linux issued a revenue warning last month that sent it and Red Hat shares lower.
Red Hat officials gave no revenue or profit guidance in Thursday's earnings release.
Shares of Red Hat (RHAT: Research, Estimates) lost 56 cents to $8.69 in regular-hours trading Thursday ahead of the financial report. It slipped to $8.63 in after-hours trade immediately following the report. 
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Red Hat.com
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