Red Hat, Inc. Smashed the Street Again -- With Cash to Spare

Open-source software veteran Red Hat (NYSE: RHT) crushed Wall Street's targets in the third quarter. But you shouldn't expect Red Hat to start paying dividends anytime soon, regardless of how juicy its cash flows are getting.

In the third quarter, Red Hat saw sales rising 22% year over year to $748 million. The annual revenue run rate now stands at nearly $3 billion, just two years and change after passing the $2 billion benchmark. Your average Wall Street analyst would have settled for $739 million, and the midpoint of management's own guidance stopped at $734 million.

The story was much the same on the bottom line. Red Hat's adjusted third-quarter earnings rose 20% year over year, landing at $0.73 per diluted share. Here, analysts had been looking for $0.71 per share; official guidance was centered around $0.70 per share.

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Source: Fool.com