Rackspace Hosting’s (RAX) profit margins are improving as its investments slow and a new open-source software platform gains traction with corporate customers, analysts say. Rackspace also has diversified by supporting multiple cloud computing platforms, which could provide revenue upside in 2015, say analysts. The company late Tuesday posted a Q4 earnings beat, but its revenue fell just short, as did its revenue outlook, hurt by the strong
Rackspace Hosting late Tuesday reported Q4 earnings that topped views, but revenue and Q1 sales guidance missed estimates. Shares of Rackspace (RAX), which provides cloud computing and Web hosting services, were down 4% in after-hours trading after the earnings release. “Q1 looked a bit light on guidance,” Tim Horan, an analyst at Oppenheimer, told IBD via email. Rackspace said earnings rose 86% from the year-earlier quarter to 26 cents a share,
Rackspace Hosting’s (RAX) Q4 earnings are expected to rise 35% and revenue to rise 16% when the Amazon Web Services cloud rival reports after the close Tuesday, though currency exchange rates could impact its results and guidance. Many tech firms have faced currency headwinds as the euro and yen have weakened vs. the dollar. A higher-valued dollar makes U.S. products costlier — and thus less competitive — in foreign countries. And revenue that