Rackspace Q3 Profit Tops Estimate

(RTTNews) - Rackspace Hosting, Inc. (RAX) reported net income for the third quarter of $25.7 million or $0.18 per share, compared to $16.3 million or $0.11 per share for the year-ago quarter.

Net revenue for the third quarter rose 18.3% to $459.78 million from $388.64 million a year ago.

Analysts polled by Thomson Reuters expected the company to earn $0.16 per share on revenue of $458.36 million for the third quarter.

Looking forward, the company forecasts total net revenue for the fourth quarter to range between $469 million and $476 million. Analysts currently expect the company to post revenue of $476.51 million for the fourth quarter.

The company also said its Board of Directors has authorized a repurchase of up to $500 million of the company's stock over the next two years. The company plans to execute a $200 million accelerated share repurchase as its first initiative under the program. Rackspace plans to fund the share repurchases through a combination of its available cash balance and existing line of credit. The remaining $300 million will be available for purchases in future periods.