Rackspace Beats on Revenue; Profit Misses

SAN ANTONIO (TheStreet) -- Rackspace(RAX) continues to ride the cloud revenue wave, although the company's first-quarter earnings missed analysts' estimates after the market close on Monday.

The managed hosting specialist, which is coming off a strong fourth quarter, brought in revenue of $230 million, up from $179 million in the prior year's quarter. Analysts surveyed by Thomson Reuters were looking for revenue of $226 million.

Rackspace, which does not break out non-GAAP EPS, earned 10 cents a share, up from 7 cents a share in the prior year's quarter. Analysts, however, had forecast earnings of 11 cents a share.

Investors were underwhelmed with the results, pushing the company's shares down 27 cents, or 0.62%, to $43 in extended trading.

"During the quarter we invested across the organization to drive higher growth as well as increase our service level capability and enhance our product portfolio," explained Karl Pichler, the Rackspace CFO, in a statement released after market close.

The company's total server count grew to 70,473 in the first quarter, up from 66,015 in the fourth quarter. Rackspace's total customers also climbed to 142,441 from 130,291 over the same period.

Apple shares rose $1.41, or 0.41%, to $348.07 on Monday.

-- Written by James Rogers in New York.

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