Blue Coat shares were up $1.06, or 4.1 percent, to $26.73 in afternoon trading. 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.

Lazard Capital Markets analyst Ryan Hutchinson kept his “buy” rating for the stock and raised his price target by $3 to $42, in a note to clients. Helped by a sooner-than-anticipated impact from the company’s efforts to reduce costs, the analyst called Blue Coat’s results “solid” and said earnings were much better than expected.

Hutchinson said Blue Coat’s revenue forecast looks conservative since the demand environment seems to be improving. “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.