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Red Hat announced outstanding financial results for its third fiscal quarter, which ended Nov. 30. How outstanding? The Linux company’s revenue for the quarter jumped to $135.4 million.

That is an increase of 28 percent from the equivalent 2006 quarter and 6 percent from the second quarter of this year. Drilling down, Red Hat Enterprise Linux subscriptions represented the bulk of Red Hat’s income. The company’s total RHEL income was $115.7 million. That brings RHEL’s income up 30 percent year-over-year and 6 percent sequentially.

As Red Hat CEO Matthew Szulik said during the earning call, “Analyst reports keep saying that Windows is growing faster than Linux in the server space, but that’s not what our market penetration is showing us. That’s not CEO rhetoric. That’s economic fact.”

For Red Hat’s share owners, the net income for the quarter came out to a healthy $20.3 million. That works out to a dime per diluted share. Last quarter saw 9 cents per diluted share and 7 cents per diluted share in the equivalent 2006 quarter. At the same time that Red Hat was making money, the company has also been saving money. Its total cash and equivalents at quarter’s end was $1.3 billion.

Charles Peter, Red Hat’s chief financial officer, said the company is looking for acquisition candidates with the cash. Red Hat also has a green light for a stock or bond buyback. However, in none of these cases was the company ready to announce any concrete plans.

Read the full story on Red Hat Has a Great Quarter; CEO Leaves