RALEIGH, N.C. (AP) — Red Hat Inc., which sells the Linux open source operating system, said Monday its second-quarter profit fell 14 percent, in part due to increased technology investments and acquisitions.
The company said subscriptions increased 22 percent in the quarter ended Aug. 31. That helped revenue rise 15 percent, to $322.6 million, from $281.3 million in the year-ago quarter.
But the company's net income for the period fell to $35 million, or 18 cents per share, from $40 million or 20 cents per share, in the 2011 quarter.
Excluding one-time events, including two small technology acquisitions, the company would have earned 28 cents per share.
Analysts surveyed by FactSet, on average, expected earnings per share of 29 cents on sales of $314.7 million.
"This quarter marked a significant ramp-up in investments in our nascent storage business, with the launch in late June of Red Hat Storage Server 2.0. Furthermore, we announced two small technology acquisitions in the middleware space to further round out our offerings," said Chief Financial Officer Charlie Peters in a statement.
Red Hat's expenses leaped 23 percent to $224.8 million during the quarter, with research and development, sales and marketing and general and administrative costs all rising.
Company shares fell $1.19, or 2.1 percent, to $56.35 in aftermarket trading. The stock ended Monday's regular session at $57.54, down 10 cents.