Linux vendor Red Hat is saying it will reveal better-than-expected results on its earnings call Thursday, but the unexpected resignation of its chief financial officer, Kevin Thompson, has given the companys stock a kick in the teeth.
Red Hat shares retreated 9.22 percent in the markets, a drop of $2.24 per share, on extremely heavy volume.
The company stated that Thompson is resigning for personal reasons and wants to spend more time with his family.
Prior to coming to Raleigh, N.C.-based Red Hat Inc., Thompson had been a partner in the Global Technology Industry Group of PricewaterhouseCoopers LLP, where he directed stock offerings and oversaw mergers and acquisitions at public and private technology companies. Before that, he was a senior manager at Arthur Andersen LLP for 10 years.
The market ignored Red Hats prediction that it would see a net income of more than $10 million, or 5 cents a share, for its first quarter, which ended in May. A year ago, the Linux company showed a profit of only $1.5 million.
The move was designed to push customers to migrate to Red Hats Enterprise Linux line of products, which carry an annual subscription fee.
The move, though contested, has been successful. In the last quarter, Red Hat reported that sales of subscriptions for Red Hat Enterprise Linux (RHEL) increased by 87,000 during the quarter, while renewal rates remained at about 90 percent.
This quarter, Red Hat is indicating that it sold 98,000 subscriptions of Red Hat Enterprise Linux, up 13 percent from the last quarter.