UPDATE 1-Saint-Gobain says sales up, could slow in Q4

Tue Oct 25, 2011 12:37pm EDT

* Q3 sales rise 2.6 percent to 10.75 billion euros

* Confirms full-year sales, operating profit targets

* Says organic growth could be lower in the fourth quarter (Adds background, details)

By Elena Berton

PARIS, Oct 25 (Reuters) - French building materials group Saint-Gobain on Tuesday posted a better-than-expected 2.6 percent rise in third-quarter sales, while warning that a weak economy could take a toll on growth during the final three months of the year.

Still, Saint-Gobain, which noted "markedly uneven results from one business and region to the next" confirmed its full-year sales and operating profit targets.

"Despite a more challenging environment in the last few months of this year, we confirm our full-year targets of robust organic growth and a double digit rise in operating income," Chief Executive Pierre-Andre de Chalendar said in a statement.

Saint-Gobain said the group's organic growth could be lower in the fourth quarter because of "deep uncertainties plaguing the global economy."

The world's largest construction materials company said sales in the third quarter rose to 10.75 billion euros ($14.9 billion) from 10.48 billion a year earlier, beating expectations of an average of 10.66 billion in a Reuters poll of 5 analysts.

Strong sales prices as well as buoyant residential contruction markets in France, Germany and Scandinavia helped drive sales in the quarter, while business in Asia and emerging countries continued to grow, Saint-Gobain said.

The company, which dates back to the 1660s when it made mirrors for the royal palace in Versailles, produces a wide range of materials such as insulation, roofing, glass bottles and plastic film used in Kindle readers.

Saint-Gobain shares closed 3.8 percent lower at 32.92 euros before the publication of the results, having lost around 15 percent so far this year, but outperforming the European construction sector index , which has lost around 20 percent. ($1 = 0.719 Euros) (Reporting By Elena Berton, editing by Astrid Wendlandt and Christian Plumb)