Red Hat shares fell despite reporting better-than-expected earnings.



NEW YORK (TheStreet) -- Red Hat(:RHT) reported better-than-expected third-quarter earnings Monday, but shares were sharply dropping following the report.

The open-source software company reported earnings of 28 cents per share, and revenues came in at $290 million, an increase of 23% year-over-year. Analysts polled by Thomson Reuters expected earnings of 26 cents per share, and revenues of $289.62 million.

"Red Hat continues to benefit from enterprise customers that are seeking to leverage their IT infrastructure to drive significant productivity gains and agility across their organizations. The combination of strong sales execution, market demand and market share gains contributed to organic billings and revenue growth of 23% for the quarter," stated Jim Whitehurst, President and Chief Executive Officer of Red Hat in the press release.

The company will hold a conference call at 5 p.m. ET to discuss the results.

Shares are down sharply following the earnings release, dropping 9.1% to $41.83.

--Written by Chris Ciaccia in New York

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