(J.C. Penny earnings article updated with additional information on earnings, sales, the expansion of offered lines and J.C. Penny stock movement.)

NEW YORK (

TheStreet

) --

J.C. Penney's

(JCP) - Get Report

next focus is on sales gains. But it still has some work to go as it reports a 5% drop in fourth-quarter earnings and continues to see same-store sales declines.

During the fourth quarter, the department store earned $200 million, or 84 cents a share, compared with $211 million, or 95 cents, in the year-ago period.

Excluding costs related to its pension plan, J.C. Penney actually earned $1.02 a share, significantly higher than analysts' expectations of 82 cents a share.

Sales fell 4% to $5.55 billion from $5.76 billion last year, while same-store sales sank 4.5%.

"With this strong foundation in place, our focus for fiscal 2010 is driving top-line growth," CEO Mike Ullman said in a statement. "We intend to deliver positive comparable store sales and market share growth" in the coming year.

Looking ahead, J.C. Penney expects to earn $1.55 a share in 2010, and between 16 cents and 20 cents in the first quarter. Both forecasts are in-line with Wall Street's estimates.

This outlook sent shares spiking 6% to $27.50 in pre-market trading.

J.C. Penney is expanding its offerings of exclusive brands with the Olsenboye line, a partnership with actresses Mary-Kate and Ashley Olsen.

It will also the only retailer to carry

Liz Claiborne

(LIZ)

lines starting this fall.

-- Written by Jeanine Poggi from New York

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