Red Hat beats for Q3

Red Hat, a maker of open source software, reported an adjusted third-quarter profit of $48.4 million, or 24 cents per share, on revenue of $165.3 million, which was up 22 percent over the same quarter a year ago. (statement) Analysts had been expecting earnings of 18 cents on revenue of $166.4 million.

Shares of Red Hat, which were down slightly in regular trading, recovered and edged ahead in after hours trading. The company, known for its Red Hat Enterprise Linux OS, said the rocky economic conditions have helped Red Hat. In a statement, Red Hat President and CEO Jim Whitehurst said, "Purchasing decisions for IT have changed dramatically for CIOs. In this budget-constrained environment, IT professionals are adopting open source and more specifically Red Hat to save money and enhance their competitiveness."

The earnings per share, which was up over the same quarter last year, was due, in part, to the repurchasing of common stock and convertible bonds, the company said. CFO Charlie Peters also noted: “While significant devaluations in most foreign currencies depressed our reported revenue, a combination of focused cost management and natural currency hedging enabled the company to deliver better-than-expected operating margin."

The company also noted other highlights from the quarter, including:

• an agreement with Fujitsu to provide new Linux support service
• chairman Matthew Szulik being named Ernst & Young's Overall National Winner for Entrepreneur of the Year 2008 Award.
• expanded developments in virtualization with an acquisition of Qumranet Inc.