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Red Hat misses estimates -- splits stock

Larry Dignan ZDNet.co.uk

Published: 20 Dec 1999 14:33 GMT

Red Hat missed estimates by a penny Monday in its third quarter, but said it would issue a 2-for-1 stock split.

Red Hat reported a loss of $3.6m, or a nickel a share, on sales of $5.4m. The results were a penny below First Call consensus. Third quarter sales were up 24 percent compared to $4.4m in the second quarter.

In the third quarter a year ago, Red Hat broke even on sales of $3.3m.

In a statement, Matthew Szulik, CEO of Red Hat said the revenue growth was attributed to demand for Red Hat Linux and services, expansion from Red Hat's global offices and traction for redhat.com.

Red Hat also said it declared a 2-for-1 stock split for shareholders of record December 27. After the split, Red Hat will have 137.6 million shares outstanding. The split will occur on or about January 7.

Red Hat added that it was planning a secondary offering of more shares. The company it would register the offering with the Securities and Exchange Commission soon. No further details were available.

In the third quarter, Red Hat announced numerous deals, including the acquisition of Cygnus Solutions and a strategic pact with Dell.

Shares of Red Hat are among the best performing this year as investors fell in love with Linux. Other Linux-related offerings such as VA Linux, Cobalt Networks, Andover.net have performed well. VA Linux set the record for first day IPO gains.

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