Rackspace Up After Positive Q3 Earnings Report, New $500M Buyback Plan
Rackspace Hosting, Inc. (NYSE: RAX) announced financial results Monday for the quarter ended September 30, 2014. Net revenue for the third quarter of 2014 was $460 million, above estimates of $458.36 and up 4.2 percent from the previous quarter and 18.3 percent from the third quarter of 2013.
Diluted EPS was $0.18, above analyst estimates of $0.16 and up from the $0.11 reported in the year-ago period.
Total server count in the third quarter of 2014 increased to 110,453, up from 107,657 servers at the end of the previous quarter. Revenue per server grew to $1,405 per month up from $1,375 in the previous quarter.
Rackspace initiated a $500 million buyback plan with news of the quarterly figures.
For the fourth quarter of 2014, the company is forecasting total net revenue to range between $469 and $476 million. "This range includes an expected negative foreign currency impact of approximately $5 million in the quarter or 110 basis points of sequential growth. Our expected range of net revenue assumes sequential growth of 3.0 percent to 4.5 percent on a constant currency basis, or growth of 2.0 percent to 3.5 percent on a GAAP basis.
"We are pleased with our operating performance this quarter and encouraged by the momentum we are seeing in the business,” said Taylor Rhodes, president and CEO of Rackspace. "We are poised to capitalize on the massive opportunity ahead in the managed cloud market, where we see increasing demand for our managed services and expertise. And while we made strong progress this year, we’re determined to continually improve our execution and seize our future.”
Rackspace traded at $37.82 in the after-hours session, up 1.34 percent.
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