Rackspace Hosting Inc Earnings: Here’s Why Investors are Not Excited Now
Rackspace Hosting, Inc (NYSE:RAX) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 10.97%.
Rackspace Hosting, Inc Earnings Cheat Sheet
Results: Adjusted Earnings Per Share increased 11.76% to $0.19 in the quarter versus EPS of $0.17 in the year-earlier quarter.
Revenue: Rose 20.19% to $362.2 million from the year-earlier quarter.
Actual vs. Wall St. Expectations: Rackspace Hosting, Inc reported adjusted EPS income of $0.19 per share. By that measure, the company missed the mean analyst estimate of $0.20. It missed the average revenue estimate of $367.2 million.
Quoting Management: “We got off to a slow start for the year. Building a lasting, successful business is our number one priority. However, our immediate focus is on restoring our growth trajectory. We are excited to see the industry momentum behind OpenStack and we are determined to claim the service leadership position in the Open Cloud movement,” said Karl Pichler, chief financial officer.
Key Stats (on next page)…
Revenue increased 2.63% from $352.91 million in the previous quarter. EPS decreased 9.52% from $0.21 in the previous quarter.
Looking Forward: Analysts have a more negative outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has fallen from a profit of $0.26 to a profit $0.22. For the current year, the average estimate has moved down from a profit of $1.08 to a profit of $0.93 over the last ninety days.
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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)