Tiffany's

(TIF) - Get Report

second-quarter earnings soared 53% from a year ago, thanks to strong rough-diamond sales and a lower tax rate.

The jewelry retailer earned $50.6 million, or 35 cents a share, in the quarter, up from $33.1 million, or 22 cents a share, last year. The lower tax rate contributed 5 cents a share to the latest quarter's results. Analysts were forecasting earnings of 24 cents a share in the period, according to Thomson First Call.

Tiffany's second-quarter sales rose 11% from a year ago to $526.7 million, reflecting a 6% gain in U.S. same-store sales and a 43% improvement in its "other" sales category to $26.6 million. The company said the "other" gain was largely due to the sale of rough diamonds, a line that began in the third quarter of 2004.

Analysts had been forecasting sales of $519.6 million in the most recent quarter.

Looking ahead, Tiffany put full-year earnings at $1.55 to $1.65 a share, up from its old guidance of $1.45 to $1.55 a share. Analysts were expecting earnings of $1.51 a share for the year.

"These quarterly results are encouraging and we believe well-position Tiffany for a successful second half," the company said. "Our full-year objectives call for an 8%-10% increase in net sales, including U.S. comparable-store sales growth in a mid-to-high single-digit range and Japan comparable-store sales in local currency approximately equal to the prior year."

The stock rose $2.45, or 7.4%, to $35.76 on Instinet.