MicroStrategy Inc.'s share price soared 31 percent yesterday, the day after the McLean software company posted better-than-expected third-quarter earnings.

MicroStrategy shares finished yesterday up $14.46 to close at $61.18.

The company, which sells software that helps companies mine internal data, swung to a profit of $122 million ($7.22 a share) for the quarter ended Sept. 30, compared with a loss of $24.4 million ($1.59) in the comparable period last year. Much of the improvement in earnings resulted from a one-time tax benefit of $103.6 million.

But investors reacted to the company's longer-term potential, according to analysts. Patrick E. Mason, a Pacific Growth Equities analyst, credited the big gain to MicroStrategy's consistent revenue and operating income increases, and an improving earnings forecast for fiscal year 2005.

For its next fiscal year, the company projected of as much as $48.1 million ($2.74) on revenue of $252 million. Mason said he had forecast earnings of $1.97 a share and revenue of $225 million.

"Most people value companies like this on forward earnings, so when it goes up as much as this, that's why you have this jump in stock," said Mason, who does not own MicroStrategy stock.

Douglas J. Crook, an analyst with Moors & Cabot Capital Markets, said some of the gain was because the company's stock price had been depressed by concern earlier this year that MicroStrategy was pressuring customers into paying higher prices.

The share price, which had been as high as $64.78 in February, fell to $30.16 in August.

"As you can see now, the concern was blown out of proportion," said Crook, who also does not own any shares. He noted that MicroStrategy added 90 new customers in the quarter and recorded five deals worth more than $1 million in this quarter.

"This software is sold through references. The ability to do a reference sale is critical," Crook said, noting that MicroStrategy could not have attracted new customers without good word of mouth.

Sanju K. Bansal, MicroStrategy's chief operating officer, said the company has been upfront about the increases and that there was no undue pressure.

Executives declined to comment on the stock run-up. Company founder and chairman Michael J. Saylor's stake in the company is now worth nearly $180 million.

MicroStrategy has had its ups and downs over the past few years after becoming one of the first in a string of companies with significant accounting problems.

In March of 2000, the company announced that it was restating its 1999 revenue. Instead of a profit of $12.6 million, as it had previously announced, MicroStrategy had a loss of about $34 to $40.3 million.

The share price fell 62 percent on the announcement, slashing $11.1 billion from its market value.

Crook said there are still some lingering fears over corporate governance at MicroStrategy and that he was concerned when the company recently announced that two of its five outside directors had left. Company officials said in an interview that they plan to replace them.

Nevertheless, Crook said yesterday's run-up reflects "that greed is prevailing over fear. People are looking through those concerns and seeing the potential for earnings strength."

Chief Operating Officer Sanju K. Bansal says MicroStrategy did not pressure customers.