There's lots of holiday cheer to go around in North Carolina this season. Linux leader Red Hat (NYSE: RHT) reported a very strong third quarter, with 28% higher sales than in the year-ago period, 24% stronger operating cash flow, and 39% fatter net income. Investors liked what they saw, giving the share price a 12% boost on Friday on very heavy volume.
At the same time, longtime CEO Matt Szulik tipped his fedora in farewell as he handed the CEO and president reins over to former Delta Airlines (NYSE: DAL) COO Jim Whitehurst. Szulik cited family health problems as the reason for leaving, although he stays on as chairman of the board.
Keeping the former Big Cheese involved for a while should ensure a smoother transition, and Whitehurst comes with fine credentials, having led a multibillion-dollar business through hard times, a bankruptcy restructuring, and international expansion.
Szulik said Whitehurst got the job because he understands the open-source mentality of Red Hat better than the other candidates, and he runs four different flavors of Linux on his own home network. He's got a degree in computer science, and he started his career as a software developer.
So Szulik leaves the company in surprisingly appropriate hands. The Whitehurst hire reminds me of when Google (Nasdaq: GOOG) tapped Novell (Nasdaq: NOVL) CEO Eric Schmidt to lead the young company into a big, bold future, except that Red Hat looked in some mildly surprising places to find its man.
The numbers are all headed in the right direction, and there is a strong management team at the helm. And unlike fellow growth-stock hopeful Hansen Natural, the board is deep and diverse, sharing board members with big names such as Anheuser-Busch and Boston Scientific.
The Ghost of Christmas Yet to Come tells tales of red hats under the tree for many, many years. The Linux revolution is happening as we speak, and Red Hat remains the provider to beat -- as it always was.
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