On Thursday, Bally reported results for the quarter ended Sept. 30. The company earned $21.3 million, or 37 cents per share, compared to a year-ago loss of $200,000, or break-even on a per share basis.

Revenue increased 23 percent, to $189 million from $153.8 million, as Bally sold 50 percent more new gaming devices. Margins on equipment widened to 46 percent, from 32 percent a year ago.

Analysts polled by Thomson Financial expected a profit of 27 cents per share on $180.7 million in sales.

Bally also raised its profit and sales outlooks for fiscal 2008, which ends on June 30. It expects to earn $1.55 to $1.85 per share, or $1.70 to $2 per share excluding one-time charges, on revenue of more than $865 million.

In August, the company forecast a profit between $1.25 and $1.55 per share, or $1.39 to $1.69 per share on an adjusted basis, and more than $830 million in revenue.

The stock has jumped 17.8 percent from its close on Dec. 19, and on Monday it reached an all-time high of $52.83 before closing at $51.68.

JPMorgan analyst Harry Curtis raised his rating on the stock to "Neutral" from "Underweight," saying Bally's margins should remain strong for the rest of fiscal 2008, and revenue should grow in the second half. He no longer believes rising expenses will cancel out revenue from the company's newest products.

"In our view, management has done a terrific job turning around the company over the past few years," he said. "We now believe Bally's increasing product sales/game operations market share and strength in the systems business should allow for continued strong earnings per share growth through fiscal 2009."