Red Hat fourth quarter earnings solid

Red Hat on Wednesday reported strong fourth quarter results and said it expects that it will continue to benefit from data center, server and virtualization upgrades.

The company reported fourth quarter net income of $23.4 million, or 12 cents a share, on revenue of $195.9 million, up 18 percent from a year ago. Non-GAAP earnings were 19 cents a share, three cents better than Wall Street estimates.

For the year, Red Hat reported net income of $87.3 million, or 45 cents a share, on revenue of $748.2 million, up 15 percent from a year ago.

In a statement (earnings preview), Red Hat CEO Jim Whitehurst said:

We believe that we are well positioned at the confluence of several major technology trends in the data center, including cloud computing, virtualization and middleware.

The one worry in the quarter was deferred revenue. Red Hat's fourth quarter deferred revenue was $646 million, but some analysts were expecting more. For instance, Jefferies analyst Katherine Egbert was expecting deferred revenue of $672 million.

Red Hat also said that it will buy back $300 million in stock to replace a previous buyback plan.