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Rackspace Swings to Second-Quarter Loss

Cloud-computing platform Rackspace, which went public early this month, swung to a second-quarter loss from a year-earlier profit.
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Rackspace Technology  (RXT) - Get Rackspace Technology, Inc. Report shares dropped after hours on Monday after the cloud-computing platform reported that it swung to a second-quarter loss from a year-earlier profit.

The San Antonio company, which went public early this month, reported a net loss of $33 million, or 20 cents a share, compared with net income of $62.5 million, or 38 cents, in the year-earlier quarter.

The year-earlier result reflected a $141 million unrealized gain on an equity investment. 

Second-quarter revenue rose 9% to $656.5 million from $602.4 million. 

Sales bookings more than doubled in the quarter, "further [validating] our conviction in the massive opportunity presented by the tectonic shift to multicloud," Chief Executive Kevin Jones said in a statement. 

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Capital expenditures rose $10 million year over year to $51 million. 

For the year, Rackspace expects adjusted earnings between 75 cents and 81 cents a share as revenue grows between 9% and 10%.

At last check Rackspace shares were down 7.6% to $19.73. They closed Monday's regular session up more than 10% at $21.35. 

Shares shot up Monday as the cloud-management-service provider's post-IPO quiet period ended with the analyst community mostly bullish on the stock.

nalysts at BMO Capital, Credit Suisse, RBC and Deutsche each had the equivalent of a buy rating on the company's stock with price targets ranging from $23 to $29 per share.  

The stock debuted at $21 on Aug. 5, then fell 22% in its first day of trading.