Technology
Why Rackspace Earnings Prompted So Many Analyst Target Cuts
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Rackspace Hosting Inc. (NYSE: RAX) reported its fourth-quarter financial results this past week. At first investors did not like or even receive these earnings well, but the following day the stock bounced off a 52-week low and ended the week higher than it had started. However after the fact, analysts cut their ratings and price targets.
The company had $0.24 in earnings per share (EPS) on $522.8 million in revenue. That compared to consensus estimates from Thomson Reuters of $0.23 in EPS on revenue of $521.39 million. The same period from the previous year had EPS of $0.26 and $472.42 million in revenue.
In terms of guidance, the company expects revenue to be in the range of $517 million and $521 million for the first quarter, and to be $2.08 billion to $2.16 billion in revenue for the 2016 full year. Consensus estimates call for $530.68 million in revenue in the first quarter and $2.21 billion in revenue for the full year.
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