Feb 10 Rackspace Hosting Inc's chief
executive of seven years is retiring as the web hosting company
looks to transition into a cloud software developer.
The company, whose shares fell as much as 13 percent in
extended trading, also forecast lower-than-expected revenue for
Lanham Napier, 42, who has led the company since 2006, was
replaced by Rackspace's co-founder and former CEO Graham Weston.
Rackspace, which leases online storage space to companies,
said it would work to establish itself as a service provider for
hybrid cloud, which involves storing data partly on the
"We'll continue to build our capability in the software,
build more software that helps our hybrid cloud operate better
... we're going to continue to run more and more private clouds
for companies on-premise," Weston said on a conference call with
The company, whose recent customer wins included Directv
and Swiss watch maker Swatch, forecast 2014 revenue of
$1.77 billion to $1.8 billion, largely below analysts' estimate
of $1.79 billion.
Rackspace said it has started a search process for a
long-term CEO and retained an executive recruiting firm.
Napier will remain as a consultant with Rackspace to ensure
a smooth transition, the company said.
Rackspace's net income fell to $20.8 million, or 14 cents
per share, in the fourth quarter, from $29.9 million, or 21
cents per share, a year earlier.
Revenue rose 15.6 percent to $408.1 million.
Analysts on average had expected earnings of 14 cents per
share on revenue of $404.6 million, according to Thomson Reuters