Starbucks Corp. on Thursday said its first quarter net profits rose 40 percent from a year earlier, beating Wall Street expectations. 

The Seattle-based coffee shop operator earned $68.4 million in the quarter ended Dec. 30, or 17 cents per diluted share, including the proceeds from the listing of a Japanese affiliate. 

Analysts polled by research firm Thomson Financial/First Call had projected on average Starbucks would earn 15 cents per share versus 12 cents in the same quarter a year earlier. Starbucks has predicted earnings per share would grow 25 percent in the first half of the current fiscal year. 

Starbucks booked a gain a $13.4 million from selling a portion of Starbucks Coffee Japan, Ltd. in the first fiscal quarter of 2002. Excluding the gain, net earnings were up 22 percent. 

Revenues for the quarter rose 21 percent to $805 million compared with $667 million a year earlier. 

Starbucks predicted revenues would grow about 20 percent during the current year while sales at existing stores would grow at mid-single-digit percentage rates. 

The company said it would open at least 1,200 new stores worldwide in fiscal 2002 as it continues its drive toward 20,000 from about 5,000 now. 

By the end of fiscal 2002 Starbucks will announced two new European markets, for a total of six, plus one in the Asia-Pacific region and its first ever in Latin America, the company said. 

Starbucks reiterated its 2002 earnings per share target range of 54 to 55 cents, including a two-cent capital gain booked in the first quarter. 

The company also affirmed its revenue growth targets of 20 percent to 25 percent for fiscal years 2003 through 2005 and plans to reach 10,000 stores by the end of fiscal 2005. 

Starbucks' stock closed at $23.14 on the Nasdaq exchange on Thursday, up 50 cents or 2.21 per cent.