Stocks to Watch: Rackspace, Avon (Update 1)

Rackspace Hosting shares surge after the company tops fourth-quarter earnings and revenue expectations.

Author:: Andrea Tse
Publish date:: Feb 14, 2012 8:01 AM EST

NEW YORK (

TheStreet

) --

Rackspace Hosting

(RAX)

, the cloud computing software maker and data center services provider

topped

fourth-quarter earnings and revenue expectations.

The company reported earnings of $25 million, or 18 cents a share, in the quarter on revenue of $283.3 million. The performance beat the average estimate of analysts polled by Thomson Reuters for a profit of 15 cents a share in the quarter on revenue of $281 million.

Rackspace said its total server count rose to 79,805 at the end of the quarter, up from 78,717 at the fiscal third quarter ended in September.

Rackspace shares were surging 9.3% to $53.80 in premarket trading Tuesday.

Beauty and household products maker

Avon

(AVP) - Get Report

reported fourth-quarter adjusted income of $172 million, or 39 cents a share, falling below the average analyst estimate of 51 cents.

Shares were plunging 7.4% to $16.24.

Zynga

(ZNGA) - Get Report

, the largest social gaming company in the world, is expected by analysts to post a small profit in its first quarterly report as a public company.

Zynga, knowns for its Facebook games such as "FarmVille" and "Words with Friends," is forecast to earn 3 cents a share on revenue of $302 million, up from year-earlier revenue of $195.8 million.

Shares were rising 1.4% to $13.60.

Boeing

(BA) - Get Report

said Tuesday it finalized an order from Indonesia's Lion Air for 230 airplanes valued at $22.4 billion, Boeing's largest ever commercial airplane order.

Boeing said Lion Air's order includes 201 737 MAXs and 29 next-generation 737-900 ERs.

Shares were gaining 1.1% to $75.65.

Apple

(AAPL) - Get Report

is working with component suppliers in Asia to test a new tablet computer with a smaller screen,

The Wall Street Journal

reported, citing people familiar with the situation.

Officials at some of Apple's suppliers, who declined to be named, said Apple has shown them screen designs for a new device with a screen size of around 8-inches, and said it is qualifying suppliers for it. Apple's iPad 2, launched in 2011, comes with a 9.7-inch screen.

Apple shares on Monday topped $500, finishing the trading session up 1.9% at $502.60.

Separately, the newspaper reported

Verizon Wireless

(VZ) - Get Report

and

AT&T

(T) - Get Report

will sell a version of the coming iPad that runs on their newest fourth-generation wireless networks.

Apple is expected to announce the latest version of the iPad in the first week of March.

Shares were up 0.6% to $505.44 in premarket trading Tuesday.

Tire manufacturer

Goodyear Tire & Rubber

(GT) - Get Report

reported fourth-quarter net income of $18 million, or 7 cents a share, compared with a loss of $177 million, or 73 cents, the same time last year.

Analysts polled by Thomson Reuters expected the company to report earnings of 20 cents a share.

Goodyear shares were rising 0.4% to $14.03.

Google

(GOOG) - Get Report

won approval from U.S. and European regulators for its $12.5 billion purchase of

Motorola Mobility Holdings

(MMI) - Get Report

The acquisition gives Google more than 17,000 additional patents in the largest wireless- equipment deal in at least a decade, according to data compiled by

Bloomberg

Google shares were up 0.2% to $613.40.

MetLife

(MET) - Get Report

is expected by analysts Tuesday to report fourth-quarter earnings of $1.24 a share on revenue of $16.9 billion.

Watson Pharmaceuticals

(WPI)

reported fourth-quarter net income of $225.2 millionm or $1.77 a share, beating the average analyst estimate by a penny.

-- Written by Joseph Woelfel and Andrea Tse

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Andrea Tse

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