Updated from 9:18 a.m. EDT

The Limited


exceeded Wall Street's expectations by 2 cents a share as profits rose 41% on strong sales at its Express and Limited stores and gains at

Intimate Brands


, in which the retailer owns a substantial stake.

Even so, shares of the company dropped 3%, or 1 1/4, to 48 3/8 on news of reduced operating profit for other brands, especially Structure. (The Limited closed up 7/16, or 1%, at 50 1/16.)

For the first quarter ended April 29, earnings rose to $63 million, or 28 cents a diluted share, from $45 million, or 19 cents a share, a year earlier. The consensus estimate of analysts polled by

First Call/Thomson Financial

was 26 cents.

The figures are adjusted for the spinoff last August of


(TOO) - Get Report

, a retailer of clothing for young girls formerly known as

Limited Too


Revenue rose to $2.11 billion from $2.01 billion a year ago.

The results also benefited from a 29% increase in net income at Intimate Brands, the retailer of intimate apparel, beauty and personal care products which are sold under the Victoria's Secret brand, among others, in which The Limited owns 84%.

Shares of The Limited tumbled after three of its stores failed to meet heightened expectations. Last week, the company's stock rose 5%, which was characterized as "a run-up in anticipation of better-than-expected numbers" by Richard Baum, an analyst at

Credit Suisse First Boston

. "When the numbers are just a little better than expected, investors sell it off," he added. Baum rates The Limited a buy and his firm has done no underwriting for the company.

Expectations were heightened because at the end of the fourth quarter, management of The Limited sounded optimistic about the year ahead. At the time, Leslie Wexner, chairman and chief executive, said in a statement, "We're pleased that our brand building efforts resulted in improved performance at each of our apparel brands for the year. This traction gained in 1999 fuels our optimism for continued earnings improvement at our apparel brands in the future."

Meanwhile, today's results revealed that only Express and Limited Stores showed any promise. Operating profit at Lerner New York and Lane Bryant was down, with Structure, where the company had hoped to show some improvement, down significantly.

The Columbus, Ohio-based company is in the process of spinning off noncore businesses in order to raise money and concentrate on the women's apparel market.