J.C. Penney (NYSE: JCP) was bubbling over with good news today. In the middle of a "very complex turnaround effort," the department store chain more than doubled its third-quarter profit and raised its full-year forecast.

Several areas contributed to the strong results. Like many other companies in the current economic malaise, Penney's has implemented a tough cost-cutting program and closed some weaker-performing stores. Thus, while total operating profits increased 40%, expenses edged up only 2.3%.

Also boosting performance was a tax gain related to the sale of an insurance business last year. That added $0.12 per share to the kitty, but even without that amount, Penney's earned three pennies more than expected, or $0.30 per share.

The most heartening catalyst, however, was an actual increase in demand. An unusually cold October drove more customers through the doors, and, once inside, a new centralized store presentation apparently had its desired effect. Revenue for the quarter increased 2%, while same-stores sales rose 4% in the department stores and 5% at Eckerd drug stores.

Just a month ago, management expected full-year earnings in the range of $0.90 to $1.00 per share. Buoyed by the third quarter, however, CEO Allen Questrom bumped guidance up to $1.10 to $1.15.

Considering that earnings for all of 2001 totaled only $0.26 per share, it's easy to see how far this company has progressed in just one year.