Rackspace Hosting, Inc. CEO Retires, Replaced by Chairman

Shares slump more than 10% after hours as Q4 results fail to impress.

Feb 10, 2014 at 5:44PM

Rackspace Hosting (NYSE:RAX) CEO Lanham Napier retired suddenly this afternoon. He had led the company for a little more than seven of his 14 years with the company. Chairman and co-founder Graham Weston will step in as CEO on an interim basis.

The news came on the heels of Rackspace's fourth-quarter financial report. Revenue improved 16% to $408 million, including $4.2 million in gains resulting from currency exchange rates. Net income fell 30% while per-share earnings fell to $0.14 from $0.21 in last year's Q4. Analysts were expecting $0.14 a share on $404.56 million in revenue.

Core business metrics were also mixed. Average revenue per server improved from $1,130 per month in last year's Q4 to $1,322, yet return on capital fell to 9.6% from 16.9% and operating margin declined to 6.7% from 14.1%.

Looking ahead, Napier plans to invest in and advise other entrepreneurial companies while remaining as a consultant to Rackspace in order to ensure a smooth transition. Weston, meanwhile, will be joined by Taylor Rhodes, who is moving up to president from chief customer officer.

"In 2014, we will take the next step to carve out our differentiated position and help the next adoption wave of customers reach a hybrid cloud world," Weston said in a press release. "We will continue to invest in our portfolio of services and reinforce our differentiation in the market. We will win as we always have -- one delighted customer at a time."

Rackspace shares, already down 45% over the past year, fell more than 13% in extended trading.

 

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Rackspace Hosting at the time of publication. Check out Tim's Web home and portfolio holdings, or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends Rackspace Hosting. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers