Rackspace posts mixed Q4 report, outlook soft; appoints Dell veteran to board

Wall Street was looking for earnings of 19 cents per share and $473.98 million in revenue.
Written by Rachel King, Contributor

Rackspace published fourth quarter financial results after the bell on Tuesday, and essentially there is good news and not-so-great news.

The managed cloud company reported a net income of $36.9 million, or 26 cents per share (statement), up 77 percent from the fourth quarter of 2013.

Non-GAAP earnings were 26 cents per share on a revenue of $472 million, up 15.8 percent year-over-year

But Wall Street was looking for earnings of 19 cents per share and $473.98 million in revenue.

A Rackspace spokesperson attributed the higher-than-expected Q4 earnings figure to mainly "operating improvements, but they also were positively impacted by an unusually low effective tax rate."

Rackspace president and CEO Taylor Rhodes noted in prepared remarks that the Texas-based company plans to hone in on e-commerce, big data and security in the coming year.

For the current quarter, Wall Street expects Rackspace to deliver earnings of 21 cents per share on top of $490.51 million in revenue.

Rackspace followed up with a softer revenue guidance range of $477 million to $484 million.

For 2015 overall, Rackspace estimated revenue will fall between $2.0 billion to $2.1 billion.

Earlier on Tuesday, Rackspace appointed former Dell veteran John Harper to its Board of Directors.

With more than three decades of experience in tech, finance and healthcare, Harper most recently served as vice president and chief financial officer of Dell Services, a business unit of Dell, Inc. said to be valued at roughly $8 billion.

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