Rackspace reported revenue of $480.2 million for the first quarter, up 14.1% from the year-ago quarter, but below analysts' estimates of $481.57 million. The company reported earnings of 20 cents a share for the quarter, in line with analysts' estimates for the quarter.
The company said it expects revenue to grow by 1.5% to 2.5% on a constant currency basis in the second quarter. The company reported earnings of $441.1 million in the first quarter of 2014. Analysts expect Rackspace to report revenue of $502.11 million for the second quarter.
"We delivered on our promises in the first quarter and are better positioning ourselves to benefit from the rapid growth of the managed cloud market," CEO Taylor Rhodes said in a statement.
TheStreet Ratings team rates RACKSPACE HOSTING INC as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate RACKSPACE HOSTING INC (RAX) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and solid stock price performance. Although the company may harbor some minor weaknesses, we feel they are unlikely to have a significant impact on results."