Rackspace (RAX) Stock Gains in After-Hours Trading as Earnings Top Expectations

Rackspace (RAX) stock is advancing in after-hours trading on Monday, after the company's 2015 third quarter earnings results beat expectations.
By Rachel Graf ,

NEW YORK (TheStreet) -- Rackspace Hosting (RAX) stock is gaining by 6.83% to $28.95 in after-hours trading on Monday, after the company reported its 2015 third quarter financial results after the market close today. 

The managed cloud computing company posted earnings of 26 cents per share for the most recent quarter, up from earnings of 20 cents per share for the year ago period. 

Revenue climbed by 10.7% year over year to $508.9 million, up from $489.4 million for the 2014 third quarter. 

Analysts surveyed by Thomson Reuters had forecast for earnings of 20 cents per share on revenue of $503.08 million.

"We're proud of the financial results that we delivered in the third quarter," CEO Taylor Rhodes said in a statement. "And we're excited about the new products and partnerships that we've launched in recent months, with Amazon Web Services, Intel and Microsoft."

Additionally, Rackspace proposed a $350 million offering of senior notes. It will use the proceeds to repay outstanding amounts under its senior revolving credit facility and for "general corporate purposes" such as share repurchases, according to a statement. 

Separately, TheStreet Ratings team rates RACKSPACE HOSTING INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

We rate RACKSPACE HOSTING INC (RAX) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income and revenue growth. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself and weak operating cash flow.

You can view the full analysis from the report here: RAX

RAX

data by

YCharts

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

Loading ...