) to buy from neutral.
Analyst Dave Kang says second quarter sales were up 13.4% year over year, and non-GAAP earnings per share were 17 cents vs. the 13 cents consensus. He notes that the company's weak Solutions unit was more than compensated for by its strong Products unit. He says the real surprise was improved gross margin, and cites the company's terrific job in managing expenses. He says it appears that a change in Solutions management is already paying off. He notes that after the inventory correction, it appears that the demand picture is starting to improve. He says the company sees $60 million to $68 million third quarter sales, and 17 cents to 21 cents earnings per share. He raised his 57 cents fiscal year 2006 (ending February) earnings per share estimate to 69 cents, and his 61 cents fiscal year 2007 estimate to 71 cents. He also raised his $9.20 price target to $10.70.