UPDATE 2-Greencore posts 18 pct earnings drop, shares fall

* H1 EPS falls to 7.4 euro cents

* Operating profit falls 11.7 percent to 31.4 mln euros

* Shares down 5 percent

(Adds share price, analyst quote)

By Padraic Halpin

DUBLIN, May 26 (Reuters) - Irish food company Greencore Group Plc (GNC.I) said trading held up well under challenging conditions as it posted a 17.8 percent fall in first-half adjusted earnings per share to 7.4 euro cents.

The group said on Tuesday it was comfortable with consensus analyst expectation for full-year EPS of 17 cents and planned further development in the United States, where its convenience food division was on target to double its contribution to group sales in 2009.

Its shares, which rose last week to their highest level in six months, were down 5 percent at 1.09 euros by 0830 GMT versus a 1.5 percent fall in the broader Irish market.

Dealers said the numbers were in line with forecasts, providing no further impetus to the stock after its recent run. "Maybe it was better to travel than to arrive ... because what came through was only in line with expectations," said one Dublin-based trader.

Greencore (GNC.L), which ranks itself as Britain's No.1 sandwich maker supplying supermarkets, garage forecourts and airlines, also saw operating profit fall 11.7 percent to 31.4 million euros ($43.9 million) in the half year to March 27.

"Trading in the first half of the year has held up well in challenging conditions," Chief Executive Patrick Coveney said in a statement.

"We remain on track to deliver operating profit in line with 2008 on a constant-currency basis, albeit with the seasonally more important summer period to come," Coveney added.

With approximately 80 percent of total operating profit expected to be delivered in sterling, the group said the currency translation effect year-on-year at a 0.88 to 0.90 pound range would reduce operating profit by 8 million euros.

EPS fell from 9 cents for the same period last year, a figure revised after the group uncovered manipulation of accounts by a member of staff at its Scottish mineral water division last year.

The group plans to grow its U.S. business at a faster rate than in Britain and to pursue development initiatives in the region over the next year, Chief Financial Officer Geoff Doherty told Reuters in an interview. [ID:nWLA5048]

Greencore, which also makes prepared meals under the Weight Watchers brand, concluded a 10-year deal to develop chilled foods for the brand in the United States last year following the acquisition of U.S.-based Home Made Brand Foods Inc in April.

"Greencore's H1 performance is credible given the very significant challenges it faced due to weaker consumer spending, trading down and a significant intensification of competition between retailers for market share," analysts at brokerage NCB wrote in a note. (Editing by David Holmes)