|Bid||187.55 x 800|
|Ask||187.55 x 1000|
|Day's Range||187.48 - 187.87|
|52 Week Range||115.31 - 189.40|
|Beta (3Y Monthly)||-0.27|
|PE Ratio (TTM)||75.01|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
Big Blue, which is buying the software company, should benefit from Red Hat’s strong earnings report after the deal is completed, says Evercore ISI.
Red Hat's (RHT) first-quarter fiscal 2020 results benefit from strengthening subscription revenues and solid momentum with large deals.
Red Hat (NYSE: RHT ) on Thursday afternoon reported adjusted quarterly earnings of $1 per share, which beat the analyst consensus estimate of 86 cents. This is a 38.89% increase over earnings of 72 cents ...
posted revenue ahead of analyst estimates for the latest quarter after the market closed Thursday. , said it took in $934 million for the latest period vs. analyst estimates of $931.6 million. Red Hat said adjusted net income for the period was $186 million, or $1 a share.
Red Hat (RHT) delivered earnings and revenue surprises of 17.65% and 0.88%, respectively, for the quarter ended May 2019. Do the numbers hold clues to what lies ahead for the stock?
Red Hat (NYSE:RHT) reported its quarterly earnings results late in the day Thursday, bringing in a profit that grew year-over-year, while sales topped what analysts called for, playing a role in lifting RHT stock a touch after hours today.The Raleigh, North Carolina-based software business unveiled its first-quarter results for its fiscal 2019, which saw it amass net income of $141 million, or 76 cents per share, coming in ahead of its year-ago net income of $113 million, or 59 cents per share, by 24.8%. On an adjusted basis, the company brought in earnings of $1 per share, marking a 39% increase year-over-year.Red Hat's adjusted profit for the three-month period was higher than the Wall Street consensus estimate of 87 cents per share, according to data compiled by FactSet. The company's sales tallied up to $934 million, a 15% increase when compared to the year-ago quarter, while also topping the FactSet outlook by $2.4 million.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe business' subscription revenue is the company's main growth driver, and it surged 15% when compared to the year-ago quarter, reaching $815 million. Red Hat's revenue from application development and emerging technology subscription surged 24% to $235 million."We continue to unlock the potential of developers and enterprises, enabling our customers to succeed in building next generation IT infrastructure and applications. Customer interest in Red Hat technologies is robust, evidenced by a record attendance of nearly 9,000 attendees at Red Hat Summit, our marquee user event," said Red Hat CEO Jim Whitehurst.RHT stock is up a fraction of a percentage Thursday. Shares had been gaining 0.1% during regular trading hours today in anticipation of the company's results. More From InvestorPlace * 7 Value Stocks to Buy for the Second Half * 6 Stocks Ready to Bounce on a Trade Deal * 5 Stocks to Buy for $20 or Less Compare Brokers The post Red Hat Earnings: RHT Stock Edges Higher on Q1 Revenue Beat appeared first on InvestorPlace.
Red Hat (NYSE: RHT ) will be releasing its next round of earnings this Thursday, June 20. For all of the relevant information, here is your guide for Thursday's Q1 earnings announcement. Earnings and Revenue ...
is expected to report net income of $162.4 million, or 87 cents a share, on sales of $931.6 million after the market closes on Thursday, based on a FactSet survey of 14 analysts. Red Hat is currently trading at a price-to-forward-earnings ratio of 45.9 based on the 12-month estimates of 14 analysts surveyed by FactSet. In the upcoming quarter analysts are forecasting net income of $184.3 million, or 98 cents a share, on sales of $951.9 million.
IBM's focus on expanding product offerings for customers bodes well. Also, the company's improving position in the hosted cloud, security and analytics are key positives.
Online message board The Layoff revealed June 6 that IBM (NYSE:IBM) was cutting approximately 1,700 jobs from its global workforce of 340,000. Later on the same day, the company confirmed the cuts.Source: Shutterstock "We are continuing to reposition our team to align with our focus on the high-value segments of the IT market, and we also continue to hire aggressively in critical new areas that deliver value for our clients and IBM," stated a company spokesperson in an email to CNBC. If you think this round of job cuts will be good for IBM stock, I'd forget that idea. The company's stock is unlikely to go much higher in the near-term until investors get a better sense if Red Hat (NYSE:RHT) is going to be the savior CEO Ginni Rometty says it will be. InvestorPlace - Stock Market News, Stock Advice & Trading TipsHere's why. IBM's Got 7,700 Job OpeningsIBM has 7,700 vacant jobs listed on their site, but don't expect them to be filled soon. IBM's $34 billion acquisition of Red Hat is set to close in the second half of 2019. Red Hat has 13,360 employees. It's unlikely that IBM is going to fill many of the vacant positions until it completes the acquisition using some of the Red Hat employees to fill outstanding positions. * 7 Stocks to Buy That Don't Care About Tariffs In addition, the statement from the company from above suggests that as it continues to integrate Red Hat into the fold and develops a battle plan for capturing some of the high-value segments of the IT market (with Red Hat's help), it will become readily apparent how many of the 7.700 jobs it actually needs to fill. The rest will be permanently closed. IBM's been cutting jobs since 2016, and yet revenues and profits have remained virtually the same in the three years since. You can only cut jobs and expenses for so long. Eventually, you must grow your way out of trouble. Or, if you're IBM, buy your way out. At least that's the plan. Is Red Hat the Savior for IBM Stock?The answer depends on who you talk to. Evercore ISI analysts Amit Daryanani and Irvin Liu recently initiated coverage of IBM stock and had this to say about the company:"While IBM stock will likely be range bound near-term, as investors remain on the sidelines until they have a better understanding of IBM's financial profile post close of the Red Hat acquisition, our positive stance is based on our favorable view of the RHT deal which has the potential to be transformational as it significantly broadens IBM's capabilities and customer reach," the two analysts wrote in a June note to clients. Rometty believes it will be a home run. "This is about resetting the cloud landscape and we will be the undisputed, number one leader in hybrid cloud. We've been really building our business for this moment," Rometty said in October after announcing the Red Hat acquisition. "To lead in the second chapter of cloud, it's all going to be about hybrid cloud. Hybrid cloud is an emerging $1 trillion market."While I agree with Rometty that the hybrid cloud is going to be huge, I have a hard time believing that she's spent the past seven years dreaming about the possibilities. If she had, Red Hat would have become a part of IBM a lot sooner. This acquisition, as my InvestorPlace colleague Ian Bezek recently said, himself a shareholder, a must win. "The Red Hat deal absolutely has to pay off. Otherwise, IBM stock will be an even worse performer going forward. I personally still own IBM stock, but I have it on a leash. The stock would be a sell if IBM management bungles the Red Hat purchase. For IBM, it's do or die time," Bezek wrote June 4.One analyst believes IBM's purchase of Red Hat was an act of desperation."It's a desperate deal by a company that missed the boat for the last five years," BTIG managing director Joel Fishbein said about the deal in late October. "I'm not surprised that they bought Red Hat, I'm surprised that it took them so long. They've been behind the cloud eight ball. "I agree. In November, I argued that IBM stock would never revisit $200 with Rometty as CEO. As the deal gets nearer, I don't believe anything's changed for me to think she's the right person for the job. She's the one that put the company in such a desperate position. The Bottom Line on IBM StockThe fact that IBM stock is up 19% year to date through June 6 is impressive in itself because the company's stumbled severely in recent years. That is up so much says more about the state of the markets than IBM.No amount of job cuts is going to move IBM stock higher at this point. The only thing that will move it closer to $200 is proof positive that buying IBM wasn't a colossal waste of money. I'm not convinced, and neither are a lot of other investors. * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% As a result, IBM could be dead money for the next 6-12 months. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 S&P 500 Dividend Stocks to Buy at Least Yielding 3% * 7 Stocks to Buy That Don't Care About Tariffs * 5 Healthcare Stocks to Pick Up From the Wreckage Compare Brokers The post IBM to Cut 1,700 Jobs as Transformation Continues appeared first on InvestorPlace.
As it prepares to close on its $34 billion buy of Raleigh-based Red Hat, IBM is reportedly again “reposition[ing]” its team – a move that translates to an unknown number of layoffs.
Mergers and acquisitions are often lucrative for a few executives involved in the deal. As IBM works to close its blockbuster buy of Raleigh-based open source software firm Red Hat, its soon-to-be subsidiary is trying to entice its top executives to stay. In a securities filing disclosed late Tuesday, Red Hat unveiled a just-signed agreement with its CFO, Eric Shander, one that would mean a “cash retention award” if he decides to stay with the company after the $34 billion IBM deal closes.
After years of slumping revenues, disappointing earnings, and an underwhelming stock performance, IBM (NYSE:IBM) has made a huge move. It is acquiring cloud player Red Hat (NYSE:RHT) for more than $30 billion. This deal will make or break IBM's future. Management sees a trillion dollar market opportunity in the hybrid cloud, with Red Hat being a key piece of IBM's strategy to conquer that market. Red Hat also offers a way to tag along with Microsoft's (NASDAQ:MSFT) success, as Linux use has been surging within Microsoft's Azure platform.Source: Shutterstock Needless to say, if IBM made a sound purchase with Red Hat, it will revive the company's fortunes. But, having paid 10x sales for Red Hat, expectations are high. In recent weeks, IBM has raised debt funding for the purchase and gotten regulatory approval from various government bodies. It's increasingly likely that the Red Hat purchase will close soon, and with it, IBM will need to start getting results to justify the steep price tag on its purchase. The Red Hat Deal Adds Tons of DebtPrior to the Red Hat deal, IBM retained a fairly strong balance sheet. Yes, critics could point to the company's $50 billion debt load as a clear negative. However, rating agency S&P's IBM credit rating of A+ reflected the company's strong financial position. Why didn't the $50 billion of debt make IBM a riskier proposition?InvestorPlace - Stock Market News, Stock Advice & Trading TipsFor one thing, IBM has an extensive credit operation of its own called Global Financing. This division extends loans and other credits to its customers, facilitating more transactions. As of Q1, Global Financing made up nearly $30 billion of the overall debt load, leaving just $20 billion after subtracting that. In theory, many of IBM's clients could go bust if another steep recession hit or the tech industry faced a wipe-out. Still, most of that $30 billion should be good money, making IBM's balance sheet much stronger than it first looks. * 10 Heavily Shorted Stocks to Sell -- Because the Bears Are Right Still, it is weakening, especially with the Red Hat purchase. In 2017, S&P cut its IBM rating from AA- to A+ on shortfalls in revenues compared to expectations. Last fall, S&P cut its IBM rating again, now to A and has left it on negative outlook for yet another potential downgrade. Bloomberg said that the credit rating could get cut all the way to BBB -- near the edge of investment grade -- depending on how the Red Hat deal works out.IBM announced earlier this month that it is issuing $20 billion in debt to fund the Red Hat purchase. This doubles the company's effective debt load once you back out Global Finance. IBM still has some wiggle room on the balance sheet. But it has used up a lot of its borrowing capacity already. No More Stock BuybackThat will lead to one immediate potentially negative impact for IBM stock: The stock buyback is halted. IBM has had a monster stock buyback in recent years cutting the share count by a third. In fact, the company has relied on that share buyback to paper over its shortcomings elsewhere.The company has seen revenues drop 20% in recent years. Even with a rise in margins, it has not been able to offset this in terms of net income. But when you shrink the divisor, the number of shares outstanding, you can still show earnings growth even as the business shrinks. IBM will lose that cushion for at least 2020 and 2021, as it is now planning on spending its free cash flow on the dividend and paying down the Red Hat debt rather than buying its own stock.The one potential silver lining here is that IBM won't destroy any further shareholder value buying overpriced IBM stock. IBM's share price is now below where it has traded for most of this decade. That means IBM paid billions more repurchasing its stock than it is now worth on the open market. Given the business' struggles, shareholders may be happy that IBM spent money on growth again, rather than buying its stagnant stock. The Red Hat Deal Has to WorkBut whether shareholders end up happy depends almost entirely on execution from this Red Hat deal. This is a huge move for IBM. They are paying $33 billion for Red Hat and IBM's current market cap is under $120 billion. That means that IBM is spending more than a quarter of its market cap on this purchase. Should it fail to meet expectations, not only would it cause a large write-off, it'd also irredeemably tarnish management's reputation. This deal is so big that it has to work for IBM to retain its credibility as a leader in tech.Will it work? There are reasons for skepticism, as there are with most large tech mergers. It's often hard to retain employees, particularly since people view Red Hat as far more creative than IBM at this point. Plus, Red Hat's business model was quite different from IBM's. Still, the company clearly needed to do something. Its main division, Global Technology Services, saw revenues fall nearly 10% this quarter versus the previous year. Meanwhile, even more worryingly, Cloud & Cognitive Software revenues fell by 2%. Cloud is still booming for various other tech companies and is supposed to be the future for IBM as well. They absolutely must get cloud back on track if IBM stock is going to work out for its shareholders. Hence the Red Hat deal. * 7 Small-Cap ETFs to Buy Now IBM Stock VerdictA lot of people, myself included, enjoy receiving the nearly 5% dividend yield from IBM stock. It's a primary reason to own the stock in fact. IBM has also managed huge rates of dividend increases over the past twenty years. However, Red Hat muddies the picture here as well. The company has shrunk its share count by 25% since just 2012. Theoretically, if a company had 100 shares then, it has only 75 now. If you had a fixed pot of $225 to pay annual dividends, it could pay $2.25 per share in dividends back then. Now it can pay $3 per share simply because the pie is getting split into far fewer slices.This virtuous cycle stops now that the share buybacks are halted. For IBM to continue its dividend growth, it now needs more net income to drive that lever. As we say this year, IBM gave us its smallest dividend increase in ages. For IBM to get back on track, both in terms of earnings and dividend hikes, the Red Hat deal absolutely has to pay off. Otherwise, IBM stock will be an even worse performer going forward. I personally still own IBM stock, but I have it on a leash. The stock would be a sell if IBM management bungles the Red Hat purchase. For IBM, it's do or die time.At the time of this writing, Ian Bezek owned IBM stock. You can reach him on Twitter at @irbezek. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 Stocks to Sell Impacted by the Mexican Tariffs * 6 Big Dividend Stocks to Buy as Yields Plunge * The 10 Biggest Announcements From Apple WWDC 2019 Compare Brokers The post Will IBM's Huge Bet on Red Hat Pay Off? appeared first on InvestorPlace.
IBM Wants to Transform Senior Homes with Vehicle Technology(Continued from Prior Part)US companies meet different fates at the hands of EU regulatorsEU antitrust regulators have opened a review of IBM’s (IBM) proposed acquisition of Red Hat
Tech Sector: Analyzing the Latest Acquisition Deals(Continued from Prior Part)IBM-Red Hat deal awaits regulatory approvalIBM (IBM) is waiting for approval from European Union (EZU) antitrust regulators for its $34 billion potential acquisition of
BRUSSELS (Reuters) - EU antitrust regulators will decide by June 27 whether to clear U.S. tech giant International Business Machines Corp's $34 billion (£26.8 billion) bid for software company Red Hat. ...
EU antitrust regulators will decide by June 27 whether to clear U.S. tech giant International Business Machines Corp's $34 billion bid for software company Red Hat. The deal, IBM's biggest, will help the ...
These top information technology (IT) stocks have outperformed the rest amid a period of heightened volatility in the tech sector for 2018.