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Thursday, July 10, 2008

Red Hat Gets Solid Start

Red Hat Inc.'s fiscal-first-quarter profit rose 6.6% as the company recorded what Chief Executive Jim Whitehurst called a “solid start to the fiscal year.” Excluding one-time items, the Raleigh, N.C., open-source software company said it earned 18 cents a share in the quarter ended May 31, the second quarter in which Mr. Whitehurst was leading the company. By that measure, the earnings report was in line with the average forecast by analysts surveyed by Thomson Financial. Analysts' estimates usually exclude one-time items. Shares of Red Hat, which closed in regular New York Stock Exchange trading at over $20 were down after hours. Red Hat's business model revolves around getting companies to adopt free open-source operating systems, such as the popular server operating system Linux, and then selling upgrades and services. In April, Red Hat said it dropped plans to develop a more consumer-friendly open-source operating system. The company's Linux software is widely used for high-end computer servers, and search engine optimization.