Cloud Hosting Company Rackspace revenue misses – 02/13/2013

Texas-based Cloud Hosting Company Rackspace said revenue grew 5 percent in the fourth quarter over the preceding three-month period, the fifth consecutive quarter in which sequential growth has slowed.

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Web hosting companies like Rackspace and competitors Equinix and Internap Network Services Corp own or lease space on a server, typically housed in data centers, warehouses lined wall-to-wall with powerful storage servers.

Rackspace Chief Financial Officer Karl Pichler cited the transition to the company’s next-generation cloud hosting as the main reason for the slowdown in growth.

Rackspace reported an increase in net income to $30 million, or 21 cents per share, in the fourth quarter from $25 million, or 18 cents per share, a year earlier.

This was in line with analysts’ estimates, according to Thomson Reuters I/B/E/S. But revenue of $353 million for the quarter missed analysts’ average estimate of $355.4 million.