By Eva Kuehnen
FRANKFURT (Reuters) - Nivea cream maker Beiersdorf stuck to its full-year operating margin target after second-quarter earnings rose, but shares in the company fell amid signs weakness in the U.S. was spreading to Europe.
Hamburg-based Beiersdorf said earnings before interest and tax (EBIT) rose 47 percent to 210 million euros ($327.5 million) from 143 million a year ago, in line with the average estimate in a Reuters poll of analysts.
Second-quarter sales rose 7.2 percent to 1.57 billion euros, slightly above the average in the Reuters poll.
Beiersdorf reiterated on Tuesday that its 2008 EBIT margin would rise above 2007's 12.4 percent. It said it expected organic sales growth above the market level, adding that it sees the global cosmetics market growing 3 to 4 percent this year.
But Chief Executive Thomas-Bernd Quaas told a conference call that business development had been sluggish in western Europe, outside Britain and Germany, in the second quarter.
Shares in Beiersdorf fell 6.2 percent to 38.61 euros by 0845 after earlier dropping as much as 9.4 percent to 37.32 euros. The German mid-cap index was 0.5 percent weaker.
"The Consumer segment -- mainly Nivea -- reported sales and profits below our and consensus estimates," said Lansbanki analyst Lutz Grueten in a note.
"Breakdown by region shows again the weakness of the underperforming U.S. activities ... but also Europe started to suffer."
Retailers are struggling with weakening consumer spending as economic growth deteriorates in Europe and the United States.
Beiersdorf's rival, French cosmetics group Clarins , last week posted a 1.8 percent drop in first-half sales, saying a worldwide slowdown in consumer spending and unfavourable exchange rates would hurt its full-year results.
Earlier last month, L'Oreal , the world's biggest beauty products group, cut its full-year growth outlook as it said it was being hit by consumer thrift in its mature markets.
Beiersdorf trades at 15.8 times 2009 projected earnings, at a discount to Clarins with a multiple of 23.2 and L'Oreal with a multiple of 16.5.
(Editing by Andy Bruce)