Red Hat posts higher 1Q profit, sales

Red Hat Inc. the software distributor behind the Linux operating system, said Wednesday its fiscal first-quarter profit climbed 7 percent, boosted by demand for its open source products in the difficult economy.

In most cases, Linux is a less expensive option compared with rival proprietary software.

For the three months ended May 31, Red Hat posted a profit of $18.5 million, or 10 cents per share, up from a profit of $17.3 million, or 8 cents per share, in the same period a year earlier.

Excluding one-time items, the company earned 15 cents per share in the latest quarter.

Revenue rose 11 percent to $174.4 million from $156.6 million a year earlier.

Analysts, on average, were expecting a profit of 14 cents per share, excluding items, on sales of $171.8 million, according to a poll by Thomson Reuters.

"Red Hat's growth is driven in part by our ability to help enterprise customers save money in a challenging (information technology) spending environment," said Jim Whitehurst, president and CEO, in a statement.

The company's shares fell 13 cents to $20 in after-hours trading. The stock had closed up 50 cents at $20.13.