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Rackspace Posts In-Line Profit; Shares Slump

NEW YORK ( TheStreet) -- Shares of Rackspace Hosting (RAX - Get Report) slipped in late trades after the cloud computing company posted an in-line profit for the third quarter.

San Antonio, Tex.-based Rackspace reported earnings of $27.2 million, or 19 cents a share, on revenue of $335.9 million for the three months ended Sept. 30, up from a year-ago equivalent profit of $20 million, or 14 cents a share, on revenue of $264.6 million.

The average estimate of analysts polled by Thomson Reuters was for earnings of 19 cents a share on revenue of $335.9 million.

"Rackspace just open sourced the cloud. We're excited to report that the rollout of our new Open Cloud platform, built on OpenStack, is finally complete," said Lanham Napier, the company's CEO, in a statement. "With the new products now in production, Rackspace offers a better, faster and more valuable cloud experience, built on an open platform that gives our customers true choice and control without the fear of being locked-in to one vendor's technology."

The stock was last quoted at $65.40, down 1%, on volume of nearly 400,000, according to Nasdaq.com.

Rackspace plans to hold a conference call to discuss its results at 4:30 p.m. ET.

Interested in more on Rackspace? See TheStreet Ratings' report card for this stock.

-- Written by Chris Ciaccia in New York

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