Early May came to a great start for web hosting provider, Rackspace. The company’s most recent quarterly results reported good news: better than expected results after demand had rose for the company’s services. The company now forecasts their current quarter revenue to end well above current Wall Street estimates.
Earlier this month, Rackspace saw their shares rise at least 12 percent after the bell closed during trading hours. They also forecast their revenue at about $434 million to $440 million for the second quarter, ending soon in June.
Analysts, on the other hand, expected revenue around $435.5 million, according to sources at Thomson Reuters. Rackspace’s Chief Executive, Graham Weston, commented that they were ‘encouraged by qualitative factors, which included the thousands of new customers they had added in the [last] quarter.’
Their net income, however, fell to $25.4 million (18 cents per share) during the quarter ended March 31. It fell from $27 million (19 cents per share) about a year earlier. Net revenue did rise 16 percent, reaching $421 million.
Analysis did expect an average profit of 12 cents per share for a revenue of $419.4 million. Other aspects of their business, such as their dedicated cloud services, saw revenue rise 11 percent. Rackspace’s dedicated cloud revenue accounts for 71 percent of their total revenue. Public cloud revenue also rose, by more than a third.
Despite the better than expected results, they did close about 30 percent down on shares during the year Monday. That Monday, their stock closed at $27.53 on the New York Stock Exchange.