Tech Stocks Rise With Broader Market; Rackspace Hosting Tumbles as CEO Steps Down

By Staff,

Shutterstock photo

Top Tech Stocks

MSFT +1.17%

AAPL +1.47%

IBM +1.71%

CSCO -0.18%

GOOG +1.23%

Technology stocks were advancing today with shares of technology companies in the S&P 500 climbing about 1.1% this afternoon.

In company news, Rackspace Hosting Inc. ( RAX ) fell nearly 18% Tuesday after the online business-services company said its chief executive had retired, trumping Q4 earnings and revenue matching analyst forecasts.

The company late yesterday said Lanham Napier had stepped down as CEO and a member on the RAX board of directors. Napier will be replaced by Graham Weston, the company's co-founder and executive chairman of the RAX board, with Napier now planning to advise and invest in startup companies. He also will work as a consultant to RAX over the next several months to ensure a smooth transition.

The company on Monday also posted Q4 earnings of $0.14 per share, matching the Capital IQ consensus. Revenue rose 15.9% year over year to $408 million, roughly in-line with analyst estimates looking for $404.64 million during the three months ended Dec. 31, 2013.

Net income totaled $21 million during the quarter, up 27.5% from the prior quarter but slipping 30% from the same quarter last year.

Speaking on a conference call with analysts and investors last night, RAX executives said they sees Q1 revenue climbing 2% to 3.5% over year-ago levels to a range of $416 million to $422 million, straddling the Capital IQ consensus expecting $417 million.

For the entire year, the company is anticipating 15% to 18% revenue growth, improving as the year proceeds to a range of $1.764 billion to $1.81 billion - also in-line with the Capital IQ consensus looking for $1.775 billion in yearly revenue. Capital spending this year is projected to be around 25% of revenue.

Shares were off 18% at $33.12 apiece in recent trade, sliding as low as $33.01 a share. The stock has a 52-week range of $32.62 to $75.37 a share.

In other sector news,

(+) MERU, (+3.0%) Posts break-even Q4 compared to $0.13 per share net loss in year-ago period, beating analyst consensus by $0.06 per share. Revenue rises 7.1% year over year to $30.2 mln, topping Street view by $3.17 mln. Expects "above-market" growth during second half of FY14.

(-) BLOX, (-47.3%) Lowers Q2 revenue outlook by $5 mln, now expecting $60 mln to $61 mln and missing Street view by at least $4.6 mln. Boosts EPS guidance by $0.01 to new range of $0.10 to $0.12, matching $0.10 per share consensus. Also cuts FY14 revenue outlook.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2014 All rights reserved. Unauthorized reproduction is strictly prohibited.

This article appears in: Investing Commodities
Referenced Stocks: RAX

More from MT Newswires


MT Newswires

MT Newswires

Follow on:

Find a Credit Card

Select a credit card product by:
Select an offer:
Data Provided by