Sears Defies Skeptics

Updated from 9:53 a.m. EDT

Continued sales declines didn't stop Sears (SHLD Quote) from swinging to a first-quarter profit that blew away Wall Street's expectations.

Hedge fund maven Ed Lampert, who created the company last year when Kmart acquired Sears Roebuck, used his usual prescription of cost controls and share repurchases to boost earnings. Skeptics, though, will be left wondering how long the company's dismal sales performance can continue.

The retailer earned $1.14 a share, or $180 million in the quarter, compared with a charge-laden loss of $9 million, or 7 cents a share, a year ago. Analysts were expecting earnings of 65 cents a share, according to Thomson First Call. ...