UPDATE: American Eagle Beats Q4 Estimates, Shares Surge

Shares of

jumped more than 8% in pre-market trading after the company reported stronger-than-expected results for the fourth quarter and issued an upbeat forecast for the first quarter. The Pittsburgh, Pennsylvania-based company posted quarterly earnings of $61.6 million, or $0.32 per share, compared to $10.5 million, or $0.05 per share, in the year-ago period. Earnings from continuing operations climbed to $0.36 per share from $0.27 per share. Its revenue rose 3% to $1.07 billion. However, analysts were expecting earnings of $0.34 per share on revenue of $1.06 billion. Sales at comparable locations came in flat in the quarter. Gross profit rose 13% to $376 million in the quarter, while operating income climbed 31% to $112 million. Selling, general and administrative expense surged 5% to $227 million. At the end of the fourth quarter, total merchandise inventories dropped 4% to $279 million from $292 million last year. American Eagle ended the fourth quarter with total cash and investments of $411 million, versus $429 million last year. Jay Schottenstein, Interim CEO said, "After a tough start to fiscal 2014, I'm pleased to see our initiatives and business priorities begin to deliver results. We achieved a solid fourth quarter, exceeding our expectations. The team executed well through an incredibly challenging macro environment. Improved merchandise assortments, combined with a better customer experience, drove strengthened sales trends and we successfully reduced promotions." For the first quarter, American Eagle projects earnings of $0.09 to $0.12 per share, versus analysts' estimates of $0.07 per share. American Eagle shares jumped 8.16% to $16.03 in pre-market trading.