Rackspace Hosting Inc. Earnings: Beats Estimates

The Cheat Sheet

Rackspace Hosting Inc. reported net income above Wall Street’s expectations for the fourth quarter. Rackspace Hosting is a provider of hosting and cloud computing services.

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Rackspace Hosting Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Rackspace Hosting Inc. rose to $25 million (18 cents per share) vs. $13.5 million (10 cents per share) in the same quarter a year earlier. This marks a rise of 85% from the year earlier quarter.

Revenue: Rose 31.9% to $283.3 million from the year earlier quarter.

Actual vs. Wall St. Expectations: Rackspace Hosting Inc. beat the mean analyst estimate of 15 cents per share. Analysts were expecting revenue of $281 million.

Quoting Management: “We are very pleased with the financial results we have generated for the fourth quarter and the full year. We accomplished our financial objectives for 2011 and ended the year really strong,” said Karl Pichler, chief financial officer.

Key Stats:

The company has enjoyed double-digit year-over-year percentage revenue growth for the past five quarters. Over that span, the company has averaged growth of 30.3%, with the biggest boost coming in the third quarter when revenue rose 32.5% from the year earlier quarter.

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 69.2% and in the second quarter, the figure rose 56.8%.

The company has now topped analyst estimates for the last three quarters. It beat the mark by one cent in the third quarter and by one cent in the second quarter.

Looking Forward: Expectations for the first quarter of the next fiscal year have not changed from 17 cents. The average estimate for the fiscal year has remained at 53 cents per share.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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