Shares of Sears Holdings Corp. rose sharply on active volume Monday morning after the company tightened its second-quarter earnings guidance and authorized another $1.5 billion for stock repurchases.

In the first two hours of trading on the Nasdaq Monday, shares were up $5.04, or 3.8 percent, to $138.14.

Sears now expects earnings for the three months ended Aug. 4 to land between $170 and $185 million, or $1.13 to $1.23 a diluted share. On July 10, the company had projected earnings of between $160 million and $200 million. By comparison, Sears registered net income of $294 million, or $1.88 a diluted share, in the second quarter of 2006.

Sears reported that its same-store sales for the quarter were off 3.8 percent at Kmart and 4.3 percent at Sears. In the latter case, increases in women’s apparel, footwear and consumer electronics worked to “partially offset” declines “across most categories.”

In revising its quarterly earnings estimates, Sears said it had endured higher markdowns, “most notably within seasonal apparel categories,” but had benefited from lower payroll expense and improved shrinkage.

“While we recognize the housing market slowdown and other economic pressures have presented a noticeable headwind to the business, we are disappointed with our second-quarter results,” said Aylwin Lewis, chief executive officer. “”We will work hard to improve our financial performance going forward.”

The $1.5 billion share repurchase authorization is in addition to $19 million remaining from previous buyback allotments.

Sears expects to report financial results on or before Aug. 30.

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