Rackspace Rises on Strong Quarter
NEW YORK (TheStreet) -- Shares of Rackspace Hosting(:RAX) jumped in late trades after the cloud computing company posted robust second-quarter results.
The AT&T(:T) and Savvis rival reported revenue of $319 million, an increase of 29% on the prior year's quarter, and above Wall Street's forecast of $317.7 million. Currency pressures, however, impacted net revenue by $2.3 million compared to the same period last year.
Rackspace, which does not break out non-GAAP EPS, said it earned 18 cents a share on net income of $25.1 million, up from 13 cents and $17.6 million in the same period last year. Analysts surveyed by Thomson Reuters were looking for earnings of 18 cents a share.
The stock was last quoted at $52.83, up 7.2%, on volume of nearly 100,000, according to Nasdaq.com.
"At the halfway point in the year, we have made a lot of progress on our plans to broaden our product and services portfolio while simultaneously managing a rapidly growing business," noted Rackspace CFO Karl Pichler, in a statement released after market close. "Keep your eyes open for more product announcements in the coming weeks and we look forward to updating you on our progress in November."
The company's adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $112 million, an increase of 11.1% sequentially and 37% year-over-year.
Rackspace, which is one of TheStreet's top cloud stocks, grew its total server count to 84,978 servers from 82,438 at the end of the prior quarter. Total customers grew to 190,958 from 180,866 over the same period.
--Written by James Rogers in New York.
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