I do not know whether this Hadith is authentic or not. But it does not really matter. What does matter however is its interpretation. And it must be in line with Quran and Sunnah. Know that ANYTHING THAT CONTRADICTS QURAN OR A MORE OFTEN MENTIONED SUNNAH OR HADITH IS INCORRECT! So if this hadith is interpreted based on race then it is incorrect. But The Hadith cannot be rejected until you know that there is no other way of interpreting this text except in a racist way, at which point we would reject it based on correct understanding of Quran and Sunnah. This very is important. You must never reject Hadith or anything concerning the religion based on emotions!
Now for the interpretation:
Here are my sources from QURAN (3:106)(35:27-28)(39:60)(80:38-42)(2:112)(31:22)(41:46)(40:40).
When it comes to the color of the offspring in this Hadith, it is not speaking about the color that comes from genes. When the Messenger of Allah (saw) actually did speak on this subject (color of race) it went a little something this: Abu Musa al-Ash’ari (May Allah be pleased with him) reported the Messenger of Allah (May peace be upon him) as saying :
Allah created Adam from a handful which he took from the whole of the earth ; so the children of Adam are in accordance with the earth : some red, some white, some black, some a mixture, also smooth and rough, bad and good.
From Quran (3:106) Allah says On the Day [of Judgment] when some faces will shine [with happiness] and some faces will be dark [with grief]. And as for those with faces darkened, [they shall be told:] "Did you deny the truth after having attained to faith? Taste, then, this suffering for having denied the truth!"
Allah tells us who will have blackened faces on the day of judgement. It is the one who rejected truth after having faith. So you see that according to Allah the ones with blackened faces are the ones who fall into this category.
From Quran (35:27-28) Allah says Seest thou not that Allah sends down rain from the sky? With it We then bring out produce of various colors. And in the mountains are tracts white and red of various shades of color and black intense in hue. And so amongst men and crawling creatures and cattle are they of various colors. Those truly fear Allah among His Servants who have knowledge: for Allah is Exalted in Might Oft-Forgiving.
Here Allah speaks about His creation in no negative way. In fact He says this in a way that will show the perfection and diversity and accuracy and amazing-ness of his creation.
From Quran (39:60) Allah says And [so,] on the Day of Resurrection thou wilt see all who invented lies about God [with] their faces darkened [by grief and ignominy]. Is not hell the [proper] abode for all who are given to false pride?
Another reason for black/darken faces on the day of judgement is lying on Allah. Again, This is what Allah is saying! You must fall into this category in Deed to be in the category of black faces on the day of Judgement.
From Quran (80:38-42) Allah says
Some faces will on that Day be bright with happiness,
laughing, rejoicing at glad tidings.
And some faces will on that Day with dust be covered,
with darkness overspread:
these, these will be the ones who denied the truth and were immersed in iniquity!
We can see by now that happiness is the brightness for they were the doers of good. And clearly regret is darkness.
In an Authentic Narration Jabir bin 'Abdullah (RAA) narrated that the Messenger of Allah (ﷺ) said: "Beware of oppression, for oppression will turn into excessive darkness on the Day of Resurrection..."
Lets see what can be taken from this: They imply this darkness is to oppressors, it implies that things in this world translate into different things in the next world. For example wudu turns into light on the day of judgement. This shows that concepts on the day of judgement are different than concepts in this world.
Another example is currency. Here it is money, there it is deeds. In fact there will be trading on that Day! Hence one of its names being The Day Of Mutual Loss And Gain. Then Blackness (really brownness), in this world, (which is beautiful) has no effect in the hereafter. And Whiteness (really light brownness/redness), in this world, (which is beautiful) has no effect in the hereafter. This is proven with a statement from the blessed lips of Allah's Messenger when he says in his last sermon:
All mankind is from Adam and Eve, an Arab has no superiority over a non-Arab nor a non-Arab has any superiority over an Arab; also a white has no superiority over black nor a black has any superiority over white except by piety and good action.
So neither being black nor being white will help you on the Day of Judgement. But only your deeds.
From Quran (2:112) Allah says Nay whoever submits his whole self to Allah and is a doer of good he will get his reward with his Lord; on such shall be no fear nor shall they grieve.
The first word in this beautiful ayat is 'bala' which means nay or yes depending on context. But it is not my focus, I will instead divert your attention to the second word. 'Mann' literally means whoever. By the way we all know Allah is All-Knowing and All-Aware, both of which are of His Divine Names. He does make mistakes nor does he forget (Quran(20:52)). So Consciously, Deliberately, and Correctly chose the word 'Mann.' A basic understanding of both languages will tell you that the word 'whoever' is unrestricted. And if one wanted to restrict it, they would have to put exception into the sentence. There is no exception here. Now remember Allah is All-Knowing and All-Aware and does not forget nor makes mistakes! So this was done Consciously, Deliberately, and Correctly!
Whoever submits his whole self to Allah and is a doer of good has grasped indeed the most trustworthy hand-hold: and with Allah rests the End and Decision of (all) affairs.
From Quran (31:22) Allah says Whoever submits his whole self to Allah and is a doer of good has grasped indeed the most trustworthy hand-hold: and with Allah rests the End and Decision of (all) affairs.
Just like before, whoever here means anyone.
From Quran (41:46) Allah says Whoever works righteousness benefits his own soul; whoever works evil it is against his own soul: nor is thy Lord ever unjust (in the least) to His slaves.
And again here is the word 'Whoever.'
From Quran (40:40) Allah says Quoting A Man of Faith Whoever works evil will not be requited but by the like thereof: and whoever works a righteous deed whether man or woman and is a believer such will enter the Garden (of Bliss): therein will they have abundance without measure.
Here again it happens! There are many more examples of the like in the Noble Quran. But lets highlight something here: The reward of the do-good-er is Jannah! And Allah used the word whoever, and did not insert any exceptions. But lets say that somehow this is not good enough. That's pretty crazy but fine.
Here is a list of Black people going to jannah by the mercy of Allah: Bilal ibn Rabah, Ammar ibn Yasir, Julaibib, Mihja ibn Salih, Abu Dharr (though arab, he was particularly brown), Sulayman ibn Dawood (peace be upon them both), and Musa (peace be upon him). There are many more.
Here is one famous white guy going to hell: .......Dajjal! Yes, the Messenger of Allah described him as one with rosy complexion. I will not list anymore going to hell who are white as it is unnecessary. For there are blacks and whites in the Hell (may Allah protect us) and also the opposite is true.