RBC Capital upgraded Network Appliance (NTAP

) to outperform from sector perform.

Analyst Robert Montague says the 8 cents first-quarter earnings per share on revenue of $260.5 million is slightly ahead of his 7 cents estimate on revenue of $251 million. He notes the 3%-7% second-quarter sequential revenue growth guidance reflects improving visibility. He says his channel data, and the first-quarter results, suggest the summer turned out better than he had expected.

Montague sees 9 cents second-quarter earnings per share on revenue of $273.5 million. He raised the 33 cents fiscal 2004 (April) earnings per share estimate to 38 cents on revenue of $1.13 billion (raised from $1.07 billion). He raised the 41 cents ficsal 2005 earnings per share estimate to 51 cents on $1.39 billion revenue (previously $1.22 billion). Also, Montague raised the $13 12-month target to $25.