Rackspace Sees 2016 Revenue Below Wall Street Views
February 16 2016 - 6:11PM
Dow Jones News
By Josh Beckerman
Cloud-computing company Rackspace Hosting Inc. said Tuesday that
it made "significant progress" on strategic and financial goals in
the fourth quarter, but it issued 2016 revenue guidance below Wall
Street estimates.
Revenue rose 11% to $508.9 million, as profit fell 13% amid
higher expenses.
Shares fell 8% to $16.70 in after-hours trading.
Rackspace expects first-quarter revenue of $517 million to $521
million, while analysts polled by Thomson Reuters project $530
million, on average. The company's full-year view is $2.08 billion
to $2.16 billion, while analysts project $2.21 billion.
The company said it has become less capital-intensive, resulting
in higher free cash flow.
Rackspace, a pioneer in the cloud market, has transitioned its
business model in recent years to become more of a services
provider offering bundled computing and support.
Rackspace and Amazon.com Inc.'s Amazon Web Services unit were
once fierce rivals, but Rackspace's new focus made it less of a
direct competitor. Last year, Rackspace and Amazon announced a
partnership that makes it easier for corporate customers to move
computing operations from their own facilities to Amazon Web
Services. Rackspace also has partnerships with Microsoft Corp. and
Intel Corp.
For the quarter ended Dec. 31., Rackspace earned of $32.1
million, or 24 cents a share, compared with $37 million, or 26
cents a share, a year earlier. Earnings excluding items were 31
cents a share.
Analysts polled by Thomson Reuters had expected earnings of 23
cents a share.
Revenue rose to $522.8 million from $472.5 million. The
sequential revenue increase was 2.7%, compared with guidance of 2%
to 3%.
Write to Josh Beckerman at josh.beckerman@wsj.com
(END) Dow Jones Newswires
February 16, 2016 17:56 ET (22:56 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
Rackspace Hosting, (delisted) (NYSE:RAX)
Historical Stock Chart
From Aug 2024 to Sep 2024
Rackspace Hosting, (delisted) (NYSE:RAX)
Historical Stock Chart
From Sep 2023 to Sep 2024