J.C. Penney's Soaring On Improved Operations (JCP)

Investors of J.C. Penney (NYSE: JCP) will like the way their shares look this morning, as it appears that Bill Ackman is having a positive influence on the company.

Shares are jumping over 6% in pre-market trading after the company reported better than expected earnings, and raised its full year outlook.

The company reported earnings of 28 cents per share on $3.9 billion in revenues, beating Wall Street estimates of 24 cents per share. The company also raised its full year earnings outlook, going to $2.15 to $2.25 per share.

"Our ability to deliver on our objectives in the first quarter reflects the progress we are making in executing the Long Range Plan for growth we announced in April 2010," said Myron E. (Mike) Ullman, III, chairman and chief executive officer. "We are successfully implementing our merchandising initiatives, with strong gains in both our men's and women's apparel businesses. Additionally, the steps we have taken to manage our expenses position us to increase the flow-through of sales to the bottom line. We are accelerating this process through a series of initiatives across the Company to maximize operational effectiveness. We expect these ongoing actions will result in substantial expense savings, beginning this year, and allow us to significantly accelerate profitability."

When Ackman of Pershing Square, and Steven Roth of Vornado Realty Trust (NYSE: VNO) announced they owned over 25% of the company, the two of them said they wanted to focus on the company's operations, as they believe the company could do so much more with what they already had, and make them more efficient. It appears that plan is playing out and shareholders are benefiting.

Shares are not screaming cheap at these levels, trading at 16 times earnings, but that is still well below the historical P/E of about 18, indicating there is still more upside to shares. Shares also sport a 2.1% dividend yield, and it looks like the company's significantly improved financial situation will allow it to raise the dividend, or potentially issue another buyback.