UPDATE 1-Ruby Tuesday beats Street, shares surge

* Q4 EPS 28 cents vs Wall Street view of 20 cents

* Company cuts $32 million of debt.

* Sees fiscal 2010 EPS 50-65 cents

* Shares up 10 pct after 12 pct gain in normal trade

SAN FRANCISCO, July 7 (Reuters) - Ruby Tuesday Inc (RT.N) on Tuesday posted quarterly net income that handily beat Wall Street estimates, helped by stabilizing sales trends, boosting the restaurant operator's shares 10 percent.

The company also said it cut its debt by $32 million.

Net income for the fiscal fourth quarter ended June 2 rose to $14.4 million, or 28 cents, from $13.9 million, or 27 cents per share, a year earlier.

Analysts, on average, had been expecting earnings of 20 cents per share, according to Reuters Estimates.

Total revenue fell 7.1 percent to $317.3 million, but same-store sales at company-owned restaurants fell only 3.2 percent, an improvement over the 6.8 percent decline in the third quarter. They fell 6.9 percent at domestic franchise restaurants.

Mid-tier restaurant operators like Ruby Tuesday saw traffic fall before the recession started in December 2007 and have been among the hardest hit as budget-conscious diners eat at home more or at lower-priced chains to save money.

Ruby Tuesday said it planned to not open any company-owned restaurants in fiscal 2010, but instead close about 14 restaurants.

Fiscal 2010 earnings per share are expected to range between 50 cents to 65 cents per share.

Ruby Tuesday shares, which surged 12.5 percent to close at $7.40 on the New York Stock Exchange, climbed as much as 10 percent after the bell to $8.12.

(Reporting by Alexandria Sage; Editing by Richard Chang)