Updated from May 26

Shares of

Tech Data

(TECD) - Get Report

rallied Thursday after the tech-services firm released a stronger-than-expected first-quarter earnings report.

Shares of Tech Data were recently up $2.86, or 8.1%, to $38.36. Raymond James upgraded the shares to strong buy Thursday morning and Morgan Stanley raised its 2005 earnings estimate to $2.38 a share, compared with the consensus of $2.30 a share.

After the bell Wednesday, Clearwater, Fla.-based Tech Data reported net income of $34.7 million, or 59 cents a share, in the first quarter ended April 30. That was up from net income of $21.5 million, or 38 cents a share, in the same period a year earlier, and higher than the 49 cents EPS consensus, according to Multex.

Revenue reached $4.8 billion, from $3.9 billion a year earlier. That also handily beat the consensus estimate of $4.6 billion. The company cited especially strong performance in Europe, where sales rang in at $2.8 billion, or 57% of worldwide sales.

The company's gross margin improved, reaching 5.71% of sales vs. 5.29% in the year-earlier period.

Looking ahead, Tech Data said it expects second-quarter net sales to range from $4.4 billion to $4.5 billion, with net income ranging from $27.5 million to $30.5 million, or 47 cents to 52 cents a share. That was basically in line with analysts' expectations for the second quarter, which called for earnings of 50 cents a share on $4.49 billion in revenue.