Red Hat's second quarter on target

Red Hat's second quarter results were in line with estimates on strong subscription revenue. Red Hat reported second quarter earnings Tuesday of $18.

Red Hat's second quarter results were in line with estimates on strong subscription revenue.

Red Hat reported second quarter earnings Tuesday of $18.2 million, or 9 cents a share, on revenue of $127.3 million. Adjusting for taxes and stock compensation, Red Hat reported earnings of 17 cents a share, in line with Thomson Financial estimates. Second quarter revenue of $127.3 million was ahead of Wall Street estimates of $125 million.

In a statement, Red Hat said revenue was up 28 percent from a year ago. Analysts were closely watching Red Hat's outlook. For its part, Red Hat executives projected revenue of $131 million to $133 million for its fiscal third quarter. Earnings excluding items were projected to be 18 cents a share. That outlook was in line with Wall Street expectations.

The company noted that it would be increasing expenses so it could better scale its processes and infrastructure in upcoming quarters.  JBoss got a significant amount of focus on the conference call. In a nutshell, executives said JBoss as a product performed better than it has since Red Hat bought the company. However, there's room for improvement.

Red Hat's balance sheet was also strong with $1.3 billion in cash on hand as of Aug. 31 and deferred revenue of $377 million, up 33 percent from a year ago.

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