(Adds details, shares)
May 12 Rackspace Hosting Inc reported
better-than-expected quarterly results as demand rose for its
web-hosting services, and the company forecast current-quarter
revenue above Wall Street estimates.
The company's shares rose as much as 12 percent in trading
after the bell.
Rackspace forecast revenue of $434 million-$440 million for
the second quarter ending June. Analysts on average were
expecting revenue of $435.5 million, according to Thomson
"We are encouraged by qualitative factors, including the
thousands of new customers we added in the quarter ...," Chief
Executive Graham Weston said in a statement.
Web-hosting companies such as Rackspace and competitors
Equinix Inc and Internap Network Services Corp
own or lease space on a server, typically housed in data
Rackspace's net income fell to $25.4 million, or 18 cents
per share, in the quarter ended March 31, from $27 million, or
19 cents per share, a year earlier.
Net revenue rose 16 percent to $421 million.
Analysts on average had expected a profit of 12 cents per
share on revenue of $419.4 million.
Dedicated cloud revenue, which accounts for 71 percent of
the company's total revenue, rose 11 percent. Public cloud
revenue rose by more than a third.
Rackspace, whose shares declined about 30 percent in the
year to Monday's close, is facing intense competition in the
cloud business from Amazon Inc, Microsoft Corp
and International Business Machines Corp.
The stock closed at $27.53 on the New York Stock Exchange on
(Reporting by Soham Chatterjee; Editing by Sriraj Kalluvila)