UPDATE 2-Limited Brands reports surprise profit, shares rise

* Q1 eps 1 cent vs Wall Street view for loss of 3 cents

* Cost cuts offset softer sales

* Q1 sales fall 10.4 pct

* Limited raises 2009 eps forecast

* Shares rise 3 pct after hours

NEW YORK, May 20 (Reuters) - Limited Brands Inc (LTD.N) on Wednesday reported a surprise quarterly profit as cost cuts offset softer sales at the operator of the Victoria's Secret and Bath & Body Works chains, and its shares rose 3 percent after hours.

The company, which has shed jobs and frozen salaries in aggressive cost cutting, also raised its full-year forecast.

Limited shares were up 34 cents at $12 in after-hours trading, after closing at $11.66 on the New York Stock Exchange on Wednesday.

Net income came in at $2.6 million, or 1 cent a share, in the first quarter ended May 2, compared with $96.8 million, or 28 cents a share, a year earlier, the company said in a statement.

Analysts had expected the company to post a loss of 3 cents a share, according to Reuters Estimates.

Net sales fell 10.4 percent to $1.725 billion.

The company has cut about 10 percent of the staff at its home office, suspended pay raises for salaried workers and cut back on capital expenditures.

Limited's administrative costs and its cost of goods sold fell in the quarter.

The recession has hurt Limited Brand's sales of non-essential items.

Limited, based in Columbus, Ohio, said it expects 2009 earnings per share of 67 cents to 87 cents, compared with its prior outlook of 60 cents to 85 cents a share. (Reporting by Dhanya Skariachan; Editing by Toni Reinhold)