Shares of Netezza Corp. soared to a record high Friday after the data storage company posted strong growth in second-quarter net income and boosted its revenue outlook for the year.
THE SPARK: Netezza said increasing demand for its data warehouse technology helped net income from May through July more than quadruple to $3.2 million, or 5 cents per share. It expects revenue to rise 30 percent from a year ago, to about $248 million, more than the 20 percent gain it forecast in May.
THE BIG PICTURE: Netezza is emerging as an industry leader in a growing market, said Merriman Curhan analyst Alex Kurtz. The bidding war between Hewlett-Packard Co. and Dell Inc. for storage server company 3Par Inc. helps underscore the appeal of companies that help customers store and analyze data.
THE ANALYSIS: Netezza's raised guidance suggests it will have revenue this year similar to levels before the recession struck, Kurtz said. The company is "aggressively" adding salespeople to help ramp up as it expects demand to keep growing, said Oppenheimer analyst Brad Reback as he raised his price target by $4 to $20.
SHARE ACTION: Shares, which had risen 7 percent since Dell made the initial offer for 3Par, soared 29 percent Friday, or $4.30, to $19.22 in midday trading.
Shares hit a record high of $19.40 in earlier trading Friday. The stock went public in July 2007 at $12 per share.
Shares had changed hands from $8.49 to $16.31 in the past 52 weeks.