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