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PARIS, July 24 (Reuters) - French carmaker PSA Peugeot-Citroen said on Wednesday first half net profit edged down to 985 million euros, above market expectations, as it nudged up the full-year margin target for its autos division.
The company said net profit slipped 4.1 percent in the first six months of the year, while operating profit rose 8.7 percent to 1.524 billion euros on sales of 27.37 billion.
Both the net profit and operating profit figures were above consensus forecasts. Analysts surveyed by Reuters had expected the company to post net profit of 892 million euros and operating profit of 1.47 billion.
The company, which until now has been calling for an operating margin in its key autos division of 4.8 to 5.0 percent in 2002, said it was now officially targeting the top end of that range.
"Taking into consideration the results of the first half, we are now targeting an operating margin in the auto division of five percent and overall operating profit of 2.9 billion euros," the company said in a statement.
Under Chairman Jean-Martin Folz, Peugeot has discovered an unexpected flair for design which has drivers paying premium prices for flashy new models like the sleek Peugeot 307 and bubble-shaped Citroen C3.
PSA shares were the top performer on the blue chip French CAC-40 index in 2001, with a rise of 18.3 percent. They have retreated 14 percent this year, in line with the European sector .
"These results are very encouraging," said Adam Collins, autos analyst at Schroder Salomon Smith Barney, who has an "outperform" rating on the stock.
"We are encouraged by cash flow developments and they are saying they can achieve the higher end of their previous guidance despite market conditions that are worse than previously expected."