Rackspace stock drops 10% as outlook meets with chilly reception


Rackspace Technology Inc.

shares dropped in the extended session Monday as the cloud-technology services company’s forecast and results met with a chilly reception from Wall Street.

Rackspace shares fell 10% after hours, following a 1.3% gain in the regular session to close at $24.04.

Rackspace forecast adjusted second-quarter earnings of 21 cents to 23 cents a share on revenue of $735 million to $745 million, while analysts expect 23 cents a share on revenue of $733.9 million.

The company estimated full-year adjusted earnings of 95 cents to $1.05 a share on revenue of $2.9 billion to $3.1 billion, while analysts forecast $1.01 a share on revenue of $3.02 billion.

The company reported a first-quarter loss of $64 million, or 31 cents a share, compared with a loss of $48.2 million, or 29 cents a share, in the year-ago period. Adjusted earnings, which excluded stock-based compensation expenses and other items, were 23 cents a share.

Revenue rose to $725.9 million from $652.7 million in the year-ago quarter. Analysts surveyed by FactSet had forecast earnings of 21 cents a share on revenue of $721.9 million.

Bookings increased to $244 million from $231 million in the year-ago period, the company said.

Back in August, Rackspace went public after it priced its initial public offering at $21 a share.

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