Shares of Blue Coat Systems Inc. rose Wednesday after the security hardware and software maker reported better-than-expected fiscal second-quarter results and third-quarter earnings expectations.
Blue Coat shares were up $1.06, or 4.1 percent, to $26.73 in afternoon trading.
Late Tuesday, Blue Coat reported adjusted earnings of 29 cents per share on $120.4 million in revenue; analysts polled by Thomson Reuters expected adjusted earnings of 26 cents per share on $120.1 million in revenue.
The company also forecast third-quarter adjusted earnings of 31 cents to 36 cents per share on $121 million to $126 million in revenue. Analysts are looking for 30 cents per share on $125 million in revenue.
In a note to clients, Lazard Capital Markets analyst Ryan Hutchinson kept his "buy" rating for the stock and raised his price target by $3 to $42. The analyst called Blue Coat's results "solid" and said earnings were much better than expected, helped by a sooner-than-anticipated impact from the company's efforts to reduce costs.
Hutchinson said Blue Coat's revenue forecast looks conservative since the demand environment seems to be getting better.
"Even so, we would expect bottom-line numbers to see a lift even on unchanged revenue estimates and as such we view strengthening demand as a lever for additional upside," he said.