UPDATE 2-Overstock turns a profit, shares soar

* Q4 EPS 55 cents vs year-ago loss 3 cents

* Q4 revenue up 27 percent

* Shares up 23 percent (Adds margin, costs, restatement detail; updates shares)

SAN FRANCISCO, March 31 (Reuters) - Online retailer Inc OSTK.O reported a fourth-quarter profit as sales jumped, reversing a year-earlier loss and sending its shares up 23 percent.

Net income was $12.7 million, or 55 cents per share, compared with a year-ago net loss of $705,000, or 3 cents per share.

“It’s nice to be profitable,” Chief Executive Patrick Byrne said in a statement on Wednesday. The company also posted a profit in the 2009 second quarter.

Spending on sales and marketing, technology and general and administrative costs all fell as a percentage of total revenue. Gross margins rose in the quarter to 17.1 percent of revenue from 16.5 percent a year earlier.

Revenue rose 27 percent to $322.4 million, the company said.

Overstock sells excess inventory of clothing, accessories, furniture and other items on its website.

In February, the company said it would restate its 2008 results due to what it called “operational errors” that shifted $1.7 million of income from 2009 to 2008. The news release issued on Wednesday included the restated 2008 fourth-quarter numbers.

Overstock shares rose as high as $17.84, before trading up $3.20 at $16.90 on Nasdaq shortly before the close. (Reporting by Alexandria Sage; editing by John Wallace and Richard Chang)