Shares of Rackspace Hosting were off over 8% in the after market session after the cloud-computing company posted lower quarterly earnings yet again. The highlights are as follows:
Rackspace beats by $0.09, reports revs in-line; guides Q1 revs below consensus; guides FY16 revs below consensus
- Reports Q4 (Dec) earnings of $0.31 per share, $0.09 better than the Consensus of $0.22; revenues rose 10.7% year/year to $522.8 mln vs the $521.16 mln Consensus. Adjusted EBITDA for Q4 of 2015 was $184 million, for a margin of 35.1 percent, up 11.0 percent from the fourth quarter of 2014.
Co issues downside guidance for Q1, sees Q1 revs of $517-521 mln vs. $530.08 mln Consensus Estimate.
Co issues downside guidance for FY16, sees FY16 revs of $2.08-2.16 bln vs. $2.21 bln Consensus Estimate.
Guidance Details: Excluding the expected negative impact of currency movements and a small divestiture, we expect our normalized year-over-year growth rate for the quarter to range between 9.2 percent and 10.2 percent.... Excluding the expected negative impact of currency movements and a small divestiture, we expect our normalized growth rate for the year to range between 6 percent and 10 percent. Adjusted EBITDA margins are expected to range between 33 percent and 35 percent for the first quarter and the full year.
There is no solace in any of these charts.
This company started seeing issues last year as AWS started beefing up its cloud business. Last May management blamed its struggles on currency rates and one time costs, but as we've learned in the last 10 months these issues are systemic.
With guidance cut yet again there really hasn't been much hope for the stock and that appears to continue as the stock's off 8% in the aftermarket.
This theme is what we expected before earnings today. As described in the earnings packet.
BIAS: GET THE FUCK OUT.