Rackspace posts jump in 3rd-quarter profit

AP News
Posted: Nov 10, 2009 8:14 AM

Rackspace Hosting Inc. posted a 45 percent jump in third-quarter profit as revenue climbed and the company won new customers.

The provider of hosting services said late Monday that it earned $7.6 million, or 6 cents per share, up from $5.2 million, or 4 cents per share, a year ago. Earnings matched the average forecast from analysts polled by Thomson Reuters.

Revenue climbed by 17 percent to $162.4 million, topping Wall Street's forecast of $159.1 million. Rackspace said it grew its costumer base by a little more than 10,000 to 80,944.

The company has been pushing into the business of so-called "cloud" computing, allowing customers to store data online rather than on their own servers. It says cloud revenue climbed 17 percent from the second quarter to $15.3 million. The segment now accounts for about 10 percent of revenue, up from 5 percent a year ago.

Shares of Rackspace advanced $1.68, or 9.1 percent, to $20 in premarket activity Tuesday. The stock has ranged from $4 to $19.39 over the past year.