Rackspace Hosting Inc (RAX. N), a web hosting company, has forecasted revenue for the current quarter below market estimates. The company said that a strong dollar has hurt its revenue growth in the first quarter.

The shares of the company have been facing tough competition from Amazon. com Inc (AMZN. O), Google Inc (GOOGL. O) and Microsoft Corp (MSFT. O). They were 13% down in extended trading on Monday.

In a post-earnings call, Rackspace Chief Executive Taylor Rhodes said that the revenue from a contract with a 'large' financial services company will be realized only in the third quarter after hurting revenue growth in the second quarter.

In the quarter, Rackspace Hosting is going to take a one-time charge as a customer has moved some of its 'production elements' away from a Rackspace data center in the United Kingdom.

The company is expecting revenue to grow between 1.5% and 2.5%% in the current quarter on a constant currency basis from first quarter. If it happens then that would translate to revenue of $487.4 million-$492.2 million.

According to Thomson Reuters I/B/E/S, analysts on average had expected revenue of $502.1 million.

Rackspace leases online storage space to companies and provides its clients management and support services for their cloud-based operations. A third of the company's revenue comes from outside the United States.

According to the company, foreign currency exchange rates have hurt its revenue growth. Revenue increased 14.1% to $480.2 million in the first quarter ended March 31. On a constant currency basis, revenue has shown 16.6% growth.

Analysts were expecting revenue of $481.6 million.

Net income has gone up to $28.4 million, or 20 cents per share, from $25.4 million, or 18 cents per share, a year earlier. Analysts were expecting a profit of 20 cents per share.

On Monday, Rackspace shares closed at $53.13 on the New York Stock Exchange. They have risen 89% in the last 12 months.