Rackspace Hosting (RAX) Stock Declines After Earnings, CEO Retires

Shares of Rackspace Hosting Inc. (RAX) were off -4.56 or -11.30 percent in pre-market trading on Tuesday after the company announced fourth quarter earnings after the close on Monday. Rackspace stock closed at $40.36, up +0.85 or +2.15 percent in Mondayâ s regular trading session. The company reported earnings of $0.14 per share in line with expectations while revenue of $408 million beat expectations by +3.4 million.

Nevertheless, guidance for revenue for its 2014 fiscal year failed to meet expectations. Rackspace also announced its chief executive since 2006, Lanham Napier, was retiring and being replaced by co-founder and former CEO Graham Weston.
San Antonio, Texas based Rackspace Hosting Inc. is a global IT hosting company offering cloud services and providing hybrid cloud solutions to clients in the United States, Australia, Switzerland, The Netherlands, Hong Kong , Israel and the UK. The company runs its app division from Blacksburg, VA with additional offices in Austin, TX and San Francisco, CA. Rackspace reported net income of $21 million for the quarter, up +27.5 percent from the third quarter and down -30 percent for the same period one year ago. Net revenue of $408 million was up +5.0 percent from the previous quarter and +16 percent from 2012â s fourth quarter. Currency translation positively impacted revenue by $4.2 million compared to the third quarter and $0.8 million versus the same period last year. The company reported its guidance for 2014 revenue of $1.77 billion to $1.8 billion; analysts estimated 2014 revenue of $1.79 billion. In a separate press release, Rackspace announced the retirement of Lanham Napier, CEO and a member of the board of directors. Mr. Napier plans on advising other entrepreneurial companies and will remain in a consulting capacity with Rackspace for several months to ensure a smooth transition. â

Published on Feb 11, 2014
By Jay Hawk
Jay Hawk
Jay Hawk enjoyed a 12-year professional financial markets career incorporating extensive first hand futures and options experience obtained by trading in the stock, commodity and forex markets on U.S. exchanges. Since retiring as a full-time financial market professional, he has been actively trading stock, commodities, forex and options for his own account and managing funds for others, as well as writing financial market commentary and educational articles.

Copyrighted 2020. Content published with author's permission.

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