(RTTNews) - Monday, hosting and cloud computing company Rackspace Hosting Inc. (RAX: News ) reported a higher third quarter profit reflecting a 17.4% growth in revenue.

Rackspace's third quarter net income surged to $7.6 million or $0.06 per share from $5.2 million or $0.04 per share in the year ago period.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.07 per share for the quarter. Analysts' estimates exclude one-time items.

The San Antonio, Texas-based company's net revenue grew to $162.4 million from $138.3 million in the comparable quarter last year. Fourteen analysts expected revenue of $159.05 million for the quarter.

Managed hosting revenue increased to $147.1 million from $131.9 million and cloud revenue went up to $15.3 million from $6.4 million in the year-ago quarter. Rackspace's cloud business now represents approximately 10% of its total net revenues, up from only 5% in the same quarter last year.

Net income margin was 4.7% , up from 3.8% in the same quarter last year.
Third quarter, income from operations increased to $13.1 million from $9.4 million last year. Total costs and expenses for the quarter increased to $149.2 million from $128.8 million in the prior year.

Total server count increased to 54,655, and total customers increased to 80,944 for the quarter.

For the nine-month period, net income was $21.18 million or $0.17 per share compared to $14.8 million or $0.13 per share in the prior year. Year-to-date revenue was $459.4 million, up from $388.7 million last year.

RAX closed Monday's regular trading at $18.32, up $0.54 or 3.04% on a volume of 1.15 million and in after hours the stock is trading at $17.42, down $0.90 or 4.91% on the NYSE.

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by RTT Staff Writer

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