What to Expect When Red Hat Reports After the Close

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Red Hat Inc. (NYSE: RHT) is scheduled to release its fiscal second-quarter financial results after the markets close on Wednesday. The consensus estimates are calling for $0.82 in earnings per share (EPS) and $829.49 million in revenue, up from the $0.77 per share and $723.36 million posted in the same period of last year.

Previously, the company issued guidance for this quarter. Red Hat expects to see EPS of $0.81 and revenue between $822 million and $830 million.

Red Hat is the world’s leading provider of open source software solutions, using a community-powered approach to reliable and high-performing cloud, Linux, middleware, storage and virtualization technologies.

In 2015 the company formed a partnership with once bitter rival Microsoft that would bring more flexibility to hybrid cloud enterprise environments. Specifically, the partnership allows cloud products running under the Linux operating system to integrate with Microsoft’s cloud computing platform Azure, a huge move after years of competition.

In May the companies expanded their alliance to empower enterprise developers to run container-based applications across Microsoft Azure and on-premises. With this collaboration, the companies will introduce the first jointly managed OpenShift offering in the public cloud, combining the power of Red Hat OpenShift.

Excluding Wednesday’s move, Red Hat has outperformed the broad markets, with the stock up 33% in the past 52 weeks. In just 2018 alone, the stock is up closer to 19%.

A few analysts weighed in on Red Hat ahead of the earnings report:

  • JPMorgan had a Neutral rating and a $150 price target.
  • RBC has an Outperform rating with a $169 price target.
  • Barclays has an Overweight rating with a $166 target price.
  • BMO Capital Markets has a Market Perform rating with a $177 target.
  • Cowen has a Buy rating with a $165 price target.
  • Wells Fargo has an Outperform rating with a $170 target.

Shares of Red Hat were last seen down 1% at $140.96, with a consensus analyst price target of $164.71 and a 52-week trading range of $104.51 to $177.70.