Red Hat beat earnings expectations and announced a large share buyback plan. That's good enough for some upward movement in the share price, right? No, the stock is way down after the company announced disappointing guidance.
- Red Hat is getting smoked after giving disappointing second-quarter guidance.
- It beat on first-quarter 2019 earnings, and Thursday, announced a $1 billion share buyback plan.
- Still, the stock is down.
- Watch Red Hat trade in real time here.
Shares of Red Hat are getting smoked on Friday, to the tune of 10.52% to $148.30 apiece. The drop comes after the open-source-software-products firm gave disappointing guidance Thursday in its first-quarter 2019 earnings release.
Although first-quarter revenue of $814 million and adjusted earnings-per-share of $$0.72 beat Wall Street estimates, the guidance was worse-than-expected.
Red Hat's press release gave guidance of $822 million-$830 million in revenue for the second quarter, below Wall street's expectation that guidance would be $855 million. Red Hat's guidance for second-quarter EPS is $0.81, below Wall Street's expected guidance of $0.89.
The company also announced a $1 billion share buyback plan in another press release, which seemed to do not much for the stock.
Red Hat shares were largely flat for the week until it released guidance. They're now down 13.7% this week.