Rackspace Hosting (NYSE: RAX ) reported earnings on Feb. 12. Here are the numbers you need to know.
The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Rackspace Hosting met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share expanded significantly.
Gross margins grew, operating margins grew, net margins contracted.
Rackspace Hosting reported revenue of $352.9 million. The 19 analysts polled by S&P Capital IQ expected sales of $355.4 million on the same basis. GAAP reported sales were 25% higher than the prior-year quarter's $283.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.21. The 17 earnings estimates compiled by S&P Capital IQ anticipated $0.22 per share. GAAP EPS of $0.21 for Q4 were 17% higher than the prior-year quarter's $0.18 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 73.0%, 220 basis points better than the prior-year quarter. Operating margin was 14.1%, 10 basis points better than the prior-year quarter. Net margin was 8.5%, 30 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $377.2 million. On the bottom line, the average EPS estimate is $0.24.
Next year's average estimate for revenue is $1.64 billion. The average EPS estimate is $1.10.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 923 members out of 1,005 rating the stock outperform, and 82 members rating it underperform. Among 247 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 219 give Rackspace Hosting a green thumbs-up, and 28 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Rackspace Hosting is outperform, with an average price target of $68.45.
Internet software and services are being consumed in radically different ways, on new and increasingly mobile devices. Is Rackspace Hosting on the right side of the revolution? Check out the changing landscape and meet the company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.
- Add Rackspace Hosting to My Watchlist.