J.C. Penney reported first-quarter profits were halved and on Thursday predicted "difficult" conditions for the entire year as consumers pull back on spending.

Net income fell to $120 million, or 54 cents per share, from $238 million, or $1.04 per share, a year ago, the suburban Dallas-based retailer said.

Total sales fell 5 percent to $4.13 billion from $4.35 billion.

Profits per share were better than the 50 cents expected from analysts surveyed by Thomson Financial, however, and it said second-quarter earnings would be slightly better than analyst forecasts.

Shares rose 3.3 percent, or $1.48, to $44.73 in midday trading.

"It is obviously a very difficult time for all U.S. consumers," said Myron E. Ullman III, chairman and chief executive. "They're facing uncertainty in their financial well-being."

In April, the retailer released details from its strategy to ride out a tough period for the entire sector.

J.C. Penney said it would reduce store openings and renovation plans, while trying to cut expenses. Ullman said the company also was focused on inventory management, with plans for levels lower than a year ago after the back-to-school season. He said future merchandising commitments also were being reduced.

"We're planning conservatively for the future," Ullman told analysts.

During the first quarter, total sales decreased 5.1 percent. Comparable store sales, a key indicator of a retailer's health, decreased 7.4 percent, but was at the top end of the company's revised guidance for a high-single digit decrease.

The company said it expects same-store sales to drop in the mid-single digits in the second quarter. Continued...