Updated from Aug. 19

Network Appliance ( NTAP) is shaping up as the day's big winner in techland after the company reported a 67% jump in quarterly earnings and was unanimously praised by analysts.

The stock was recently trading for $20.30 on Instinet, up $2.20, or 12%, from its 4 p.m. EDT close.

The enterprise storage vendor earned $27.1 million, or 8 cents a share, in its first quarter ended Aug. 1. In the year-ago period, Network Appliance posted a profit of $16.2 million, or 5 cents a share.

Compared with the first quarter last year, the company's revenue jumped 26% to $260.5 million.

On a pro forma basis, which excludes such costs as the amortization of intangible assets and stock-based compensation as well as investment gains and losses, Network Appliance would have earned $28.7 million, or 8 cents a share.

Those results topped the company's guidance and Wall Street's projections. Polled by Thomson First Call, analysts were expecting Network Appliance to post pro forma earnings of 7 cents a share on $250.5 million in sales.

In the second quarter, company officials expect Network Appliance's revenue to increase 25% to 30% over the same period last year, or 7% to 8% above first-quarter revenue. The company expects to post pro forma earnings of 9 cents to 10 cents a share. Company officials did not provide GAAP guidance.

That led analysts to revise their own estimates higher. Bear Stearns now expects the company to earn 37 cents a share in the current fiscal year, up from its previous forecast of 28 cents, while CSFB now pegs the full year at 33 cents a share.

RBC Capital Markets upgraded the stock to outperform from sector perform and set a 12-month price target of $25, citing signs of a "sustainable improvement in business." The brokerage put current-year earnings at 38 cents a share.

Network Appliance saw strength in both its product sales and its services business in the quarter. Product sales increased 26.3% from the year-ago period to $235.8 million, while service revenues grew 23.1% to $24.7 million.

On the cost side, though, Network Appliance's performance was more muddled. For instance, the company's gross profit margin, which represents the difference between what it charges for its products and services and its direct costs of providing them, declined 1.97 percentage points compared with the first quarter last year to 60.5% of sales.

Meanwhile, on the operating expense side, the company's general and administrative costs shot up sharply. Overall, general and administrative expenses increased 64.9% over the year-ago quarter to $12.3 million. As a portion of sales, such costs increased 1.1 percentage points to 4.7%.

But Network Appliance kept other operating costs in check. Marketing expenses, for instance, increased at a slower rate than sales, rising 10.4% to $79.4 million. As a portion of revenues, sales and marketing expenses declined by 4.3 percentage points to 30.5%.

Research and development costs also declined as a portion of sales, falling 1.4 percentage points to 12.1%. And stock compensation charges declined in real terms, dropping $329,000, or 33.5%, to $654,000.