Rackspace forecasts third-quarter revenue above estimates

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Rackspace Hosting Inc reported better--expected quarterly revenue, helped by higher demand for its cloud management , and it forecast current-quarter revenue above analysts’ estimates.

The company, which put itself the block earlier this year, expects current-quarter revenue of $454-$461 million, higher the average analyst estimate of $454.2 million.

the second quarter ended June 30, the company added “thousands” of customers, recorded solid growth from existing customers and revenue per server was at an all- high, Chief Executive Graham Weston said a statement.

Rackspace leases online storage space and provides its clients management and support for their cloud-based .[eap_ad_2]

The company is facing tough price competition from Amazon.com Inc, Inc and Microsoft Corp for cloud that includes online storage, processing power and database .

The company expects third-quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin of 31-33 percent. It reported adjusted EBITDA margin of 32.1 percent for the second quarter.

Rackspace’s revenue rose 17 percent $441.1 million the quarter from a year earlier.

Net income remained flat at $22.5 million, or 16 cents per share.

Analysts had expected a profit of 16 cents per share revenue of $436.9 million.

The company’s shares closed at $31.31 the York Stock Exchange. The stock had lost a fifth of its value this year Monday’s close. (Reuters)[eap_ad_3]