Red Hat shares are likely to rise this morning after its latest quarterly results exceeded expectations and the Linux software company upped its guidance for the year.
Meanwhile, the Raleigh-based company has narrowed its search for a new headquarters site to "two or three" and expects to make a decision by the end of the summer, Chief Financial Officer Charlie Peters said in an interview.
The company, one of the Triangle's most successful technology businesses, announced in January that it would keep its headquarters in Wake County. Peters declined to disclose the possible sites but said "they would all be nearby." Red Hat's current headquarters is on N.C. State University's Centennial Campus.
Revenue in the fiscal first quarter that ended May 31 rose 27 percent to $264.7 million, Red Hat reported Wednesday after the close of regular stock-market trading.
Net income totaled $47 million, or 24 cents a share, up from $35.6 million, or 18 cents a share, after adjusting for stock compensation and amortization.
"Fiscal year 2012 is off to a great start," Peters said during a conference call with analysts.
Analyst Steven Ashley of Robert W. Baird & Co. said that as corporations move into cloud computing and virtualization, they're looking for the "industrial strength operating system" that Red Hat offers.
"The consensus was for billings to grow 19 percent - and they grew 28 percent," Ashley said. Billings are a leading indicator of future revenue that analysts scrutinize closely.
What is especially good news for Red Hat, Ashley added, is that the shift to cloud computing and virtualization is the beginning of long-term trend.
Red Hat, which previously projected that revenue during the current fiscal year would exceed $1 billion, upped its expectations Wednesday.
Now the company expects revenue to hit $1.07 billion to $1.085 billion, compared to $1.05 billion to $1.07 billion previously. It anticipates that earnings per share will come in at 98 cents to $1, versus earlier guidance of 94 cents to 96 cents.
In after-hours trading Red Hat shares rose as much as 5 percent after closing Wednesday at $43.72. The stock is up more than 40 percent in the past year.
Red Hat has about 3,800 workers worldwide, including about 700 in Raleigh.
Red Hat's robust employee growth - it added almost 170 workers globally in the last quarter - had economic development officials in Wake County and elsewhere coveting its headquarters. State and local officials offered the company up to $20 million in incentives, contingent on meeting hiring and investment goals, to remain in Wake County.
Peters said the company needs to make a decision on where its headquarters will be "no later than the end of the summer because it will take us time to build or prepare a new facility and move in."
Peters said that "all options are on the table," including moving into an existing building or working with a developer on a new building.
