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Rackspace Stock Drops as Adjusted Profit Beats, Outlook Disappoints

Cloud-services provider Rackspace reported higher revenue and a wider loss for the second quarter. Bookings for Q3 decelerated. The stock is lower.
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Shares of Rackspace Technology  (RXT) - Get Rackspace Technology, Inc. Report dropped Thursday after the cloud-services company reported higher second-quarter revenue and below-estimate third-quarter guidance for earnings and revenue. 

The San Antonio company reported its net loss narrowed to 18 cents a share from 20 cents in the year-earlier quarter. Shares outstanding moved up 26% to 207.9 million.

Second-quarter adjusted earnings per share of 24 cents exceeded the FactSet-survey-derived analyst consensus estimate of 18 cents. 

Revenue of $743.8 million climbed 13% from a year earlier and beat the expectation of $741.6 million.

But the company reported a 10% year-over-year decrease in bookings to $258 million. 

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For the third quarter, the company expects earnings between 23 cents and 25 cents a share on revenue between $750 million and $760 million. 

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Analysts polled by FactSet are expecting earnings of 25 cents a share on revenue of $756 million. 

Rackspace Technology shares at last check dropped 16% to $14.03. 

This is the second consecutive quarter for which the company's shares fell following its earnings release on concern about its outlook. 

In May, the company said it expected to earn 21 cents to 23 cents for the just concluded quarter. The company reported second-quarter revenue on the higher end of its $735 million to $745 million guidance at the time.