Turning the Corner at Overstock.com

Overstock.com (Nasdaq: OSTK  ) shares rose 20% yesterday -- bucking an otherwise dreary trading day -- after the company posted spectacular quarterly results.

First-quarter revenue climbed 42%, fueled by robust strength in both its direct and fulfillment partner line items. This is one of the few quarters when the online discounter kept up with market darling Amazon.com (Nasdaq: AMZN  ) , which managed to grow its net sales by 46% during the same period.

The bottom line was also Amazon-esque in that Overstock delivered a profit during a quarter when it wasn't expected. It countered last year's loss with a healthy $0.16-a-share profit, even if free cash flow still clocked in as a deficit.

After going 0-for-4 on the quarterly profit front in 2005, 2006, and 2007-- and mustering positive net income only during the holiday quarters of 2004 and 2008 -- Overstock is firmly back in the black. It has now delivered positive earnings in three of the four trailing quarters.

Its gross bookings are sharply higher and its shopping customer acquisition costs are refreshingly lower. One of the few metrics heading the wrong way is the gross merchandise volume moved through its auction business, but that is forgivable. No one is buying into Overstock with the hopes of hopping on to the next eBay (Nasdaq: EBAY  ) , especially given eBay's ho-hum marketplace business these days. Gross margins also slipped, but it's a trade-off that investors won't mind in exchange for a 31% increase in gross profit.

The real takeaway -- again -- is that surprising profit. Many pure online retailers are starting to come through as year-round winners. Amazon is no longer the only dot-com expected to skirt the red ink outside of the quarter that includes the winter holidays. Blue Nile (Nasdaq: NILE  ) and Vitacost.com (Nasdaq: VITC  ) should join Overstock.com in the black over the next few days.

Overstock's challenge will be to maintain the market's newfound respect. Investors have been burned before, and it remains to be seen if Overstock.com's obvious value message will resonate as well in an economic recovery as it did when folks were scouring for close-outs, clearances, and overstocks.

It's still a sweet -- if not entirely familiar -- place for the e-tailer to be at this moment.

Is Overstock.com back for good this time? Share your thoughts in the comments box below.