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Broomfield, Colo.-based McData's (MCDTA: news, chart, profile) shares rose $1.48 to $12.56 in recent trading as investors reacted to the company's second-quarter outlook. On Thursday, McData said it expects to report a second-quarter profit, excluding special items, of 6 to 7 cents a share, and revenue of between $106 million and $110 million.

Analysts surveyed by Thomson First Call were forecasting McData to earn 6 cents a share on sales of $106.22 million.

McData's positive forecast came as the company reported first-quarter results that showed a profit over a loss during the same period a year ago.

Company officials said demand for McData's new Spheron switch products contributed a first fiscal-quarter net profit of $5.3 million. McData's 2003 first-quarter net earnings came to 5 cents a share on revenue of $103.2 million. During the comparable quarter a year earlier, McData lost $17.1 million, or 15 cents a share, on revenue of $64.5 million.

"We had strong acceptance and demand, and a record quarter for sales of switches," said John Kelley, McData's chief executive. Kelley said that during the quarter, McData added AT&T (T: news, chart, profile), Verizon Communications (VZ: news, chart, profile) and John Deere (DE: news, chart, profile) as new customers.

Excluding one-time items, McData earned 6 cents a shares.

The figures came in above the raised forecast McData offered May 6. It was the first time McData reported quarterly earnings since shifting its fiscal year to begin in February.

Sales rose in virtually all business areas from the first quarter of 2002. Product revenue totaled $91.4 million, up 66 percent from a year ago, while software and professional services revenue was $8.4 million, a 41 percent increase from last year's first quarter. Other revenue totaled $3.4 million, down from $3.6 million last year.

McData specializes in technology used to improve the performance of storage-area networks.

EMC (EMC: news, chart, profile) remained McData's biggest customer, accounting for 61 percent of sales. McData has had close ties with EMC since being spun out from that company several years ago. IBM (IBM: news, chart, profile) was McData's second-largest customer, making up 17 percent of sales in the quarter.

Analysts said McData's outlook suggests business momentum is improving for the company. "McData appears well-positioned to extend beyond its traditional customer based to drive growth in new distribution channels," said Andrew McCullough, of Credit Suisse First Boston, in a research note to clients. McCullough maintained his "outperform" rating on McData's stock.