Rackspace Shares Drop After Revenue Miss, Outlook

Rackspace Hosting Inc. shares dropped in the extended session Monday after the cloud-based web hosting company's revenue and outlook for the quarter fell below Wall Street estimates. Rackspace shares dropped 9.3% to $48.18 on moderate volume. The company reported first-quarter earnings of 20 cents a share on revenue of $480.2 million. Analysts surveyed by FactSet had estimated earnings of 19 cents a share on revenue of $481 million. Rackspace said it expects second-quarter revenue to grow by 1.5% to 2.5% on a constant currency basis. The company reported second-quarter revenue of $441.1 million in 2014. Analysts estimate second-quarter revenue of $501.2 million.