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Rackable Runs the Table

Earnings and sales are way ahead of estimates.
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Rackable Systems


wiped out Wall Street estimates on its top and bottom lines Thursday, as sales rose 177% from a year ago and the server and storage company's operating margin more than tripled.

Rackable, whose shares are up 71% since the start of the year, earned $5.97 million, or 23 cents a share, in the quarter, compared with a loss of $4.36 million, or 84 cents a share, a year ago. Adjusted for items including stock-options expense, the company earned 30 cents a share in the latest quarter, 11 cents better than forecast.

First-quarter revenue totaled $84.4 million, up from $30.5 million a year ago. Analysts were forecasting revenue of $70.8 million in the most recent period.

In the quarter, operating revenue totaled 11% of revenue, up from 3.1% a year ago. The company's gross margin was 23.1% in the latest quarter, up from 19.4% last year.

"We are very pleased with our Q1 results and are continuing to see strong demand for our products," Rackable said in a statement.

The company also named Todd Ford president, promoting him from chief financial officer. The company's vice president of finance, Madhu Ranganathan, was named chief financial officer.