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Terayon Communications takes flight

Terayon Communications Systems shares stormed up 31 11/16, or 14 percent, to 261 5/8 Tuesday after the provider of broadband networking systems said it would top analysts' sales and earnings estimates in its first quarter.

Terayon (Nasdaq: TERN) said it expects to post sales of between $55 million to $57 million in the quarter, up from the $38.7 million it recorded in the fourth quarter.

It also said it would top the consensus profit of estimate of 1 cent a share.

On Tuesday, Lehman Brother analyst Steven Levy bumped his price target to $325 a share from $125 a share while raising his fiscal 2000 and fiscal 2001 earnings estimates.

Levy now sees Terayon pocketing 23 cents a share in fiscal 2000, up from 13 cents a share. He raised his fiscal 2001 estimate from 55 cents a share to 60 cents a share.

Company officials said stronger-than-expected demand for its high-speed networking systems were responsible for the upside surprise.

Last quarter, it posted a profit of $1.2 million, or 4 cents a share, on sales of $38.7 million.

First Call consensus currently expects Terayon to earn a penny a share in its first quarter and 11 cents a share in the fiscal year.

Its shares moved up to a 52-week high of 280 in February after announcing a 2-for-1 stock split.

The stock fell to a low of 26 3/8 in June.

Seven of the eight analysts covering the stock rate it either a "buy" or "strong buy."