Rackspace Beats Top-Line Estimates

SAN ANTONIO, Tex. (TheStreet) -- Almost a year to the day since its IPO, hosting specialist Rackspace (RAX Quote) beat Wall Street's sales estimate in its second-quarter results after Tuesday's closing bell.

Boosted by its managed hosting services, Rackspace posted revenue of $152 million, a 16% hike on the same period last year and just above Wall Street's estimate of $148.98 million.

Second-quarter revenue from managed hosting came in at $138.9 million, up from $134.2 million in the prior quarter. Revenue from cloud services was $13.1 million, up just over $2 million sequentially.

Rackspace earned 6 cents a share on net income of $7 million, up from 4 cents a share and net income of $4.2 million in the prior year's quarter. Analysts surveyed by Thomson Financial had estimated earnings of 6 cents a share.

"We have been running the business to scale the profits and returns in our managed hosting offering while investing in the long-term, game changing offerings in our cloud business," said Lanham Napier, the Rackspace CEO, in a statement. "Additionally, we have strengthened our pipeline by competing for larger opportunities and we are gaining traction in the enterprise space."

Rackspace, which competes with AT&T (T Quote) and Savvis (SVVS Quote), grew its customer list from just over 62,000 to almost 71,000 sequentially.

Shares of Rackspace were rising 4% to $14.98 in recent extended trading.

-- Written by James Rogers in New York.