Nordstrom Inc. Thursday reported its first positive earnings gain in seven periods.

The Seattle-based company’s net earnings rose to $50.7 million for fourth quarter 2001, up substantially from $27 million in 2000. Nordstrom, which raised its earnings estimates a week ago, attributed the gain to tighter inventory control and successful efforts to slash expenses.

The company’s fourth quarter earnings per share rose to 38 cents compared to 20 cents in 2000. That’s an 81% increase, noted Merrill Lynch analysts Daniel Barry and Stacy Turnof in a report released today, but it’s still down 24% from the record high of 50 cents two years ago.

Although Nordstrom’s net sales for the quarter declined 1.5% to $1.6 billion, the company succeeded in slashing expenses during the quarter by $25.4 million from the prior year.

Nordstrom worked hard during 2001 to lay the groundwork for sustainable improvement in performance, Nordstrom President Blake Nordstrom said in a statement. He said the company in 2002 will focus on driving sales growth and becoming leaner and more disciplined, in part by continuing to implement a new inventory system.

In a report released today, Bank of America Securities maintained its "Buy" rating for Nordstrom shares.

"We continue to be encouraged by the results of the company’s expense initiatives and inventory control," analyst Dana Cohen wrote. Noting that expectations surrounding Nordstrom stock remain "extremely low," Cohen said the company’s recent moves create the potential for Nordstrom to return to a 6% operating margin, which translates into $2 in earnings per share.

Cohen noted that Nordstrom’s inventories were down 15% during the quarter, resulting in gross margins of 120 basis points higher than last year.

For the year, Nordstrom reported net earnings of $124.7 million, or 93 cents per share, up from $101.9 million, or 78 cents per share, in fiscal 2000.

The company's net sales for the fiscal year totaled $5.63 billion, up from $5.53 billion .

Nordstrom shares rose 28 cents Thursday on the New York Stock Exchange and closed at $25.38.

--Staff and wire reports