PARIS, July 27, 2007 (AFP) - Shares in French luxury goods group LVMH rose on Friday, July 27th despite first-half results at the lower end of expectations, but the group stood by its objectives for the rest of the year.

Bernard Arnault - Photo : Jean Ayissi/AFP

In mid morning trading LVMH shares rose 2.85 % to 82.54 euros, on a Paris market which had shed 0.61 percent, recovering after plunging in opening deals.

LVMH had reported late on Thursday that first-half net profit rose two percent to 834 million euros (112 dollars), weighed down by high exchange rates.

Operating profit increased by 11 % to 1.44 billion euros, on sales which rose by six percent to 7.412 billion euros.

The company said it stood by "the objective of a significant rise in results", largely because of an improvement of the Japanese market, which accounts for 13 % of sales.

It said that it had achieved two-percent growth in Japan in the first half, with seven-percent growth in the second quarter, after a two-percent drop in the first quarter.

Overall sales of perfumes grew by eight percent and of cosmetics by 12 % when using comparable exchange rates, to 1.26 billion euros, it said.

Total profits were slightly lower than a forecast of Societe Generale, which had foreseen a figure of 852 million euros and Credit Mutuel CIC which expected 864 million euros.

The results prompted UBS to lower its target price for the stock to 83 euros from 87 euros and reiterate its 'neutral' stance.