Rackable Q4 Revenues Light; Sets Huge Buyback Plan
Rackable Systems (RACK) shares are trading higher after-hours on news that the company plans to buy back $40 million of its common stock. That would be about 35 percent of the company’s $116 market cap. Note that as of Dec. 31, the company had $180.6 million in cash, equivalents and investments.
No doubt, Rackable’s business is hurting. For Q4, revenue was $38.8 million, well below the consensus at $46.7 million, and down a whopping 65 percent from a year ago. The company lost 17 cents a share on a non-GAAP basis in the quarter, two cents worse than the Street consensus.