UPDATE 2-Church & Dwight Q2 profit up; raises dividend, outlook

* Q2 EPS $0.86 vs est $0.79

* Raises FY outlook range by $0.05/shr

* Ups quarterly dividend to $0.14/shr

* Shares up as much as 4 pct (Adds details, analyst comments, stock activity)

Aug 4 (Reuters) - Household and personal-care products maker Church & Dwight Co Inc (CHD.N) posted a better-than-expected quarterly profit, raised its 2009 outlook for the second time this year, and increased its quarterly dividend.

The company's shares were up 3 percent, or $1.63, at $60.65 early Tuesday morning on the New York Stock Exchange.

"We are encouraged by the continued strong fundamentals at this company, though the stock reaction could be muted by high expectations," Goldman Sachs said in a note to clients.

Investor concerns around this company have centered on its ability to defend its core laundry business from retailer shelf-space shifts and/or more aggressive actions from Procter & Gamble (PG.N) as "it tries to fix Tide," the brokerage said.

"Higher brand advertising spending in the quarter and for the full year shows that Church has the resources to defend its brands," it added.

Marketing expense at Church & Dwight, which bought Del Pharmaceuticals and over-the-counter businesses from Coty this year, rose 18 percent in the quarter.

For the second quarter, Church & Dwight, which makes Trojan condoms and SpinBrush battery-powered toothbrushes, earned $58.2 million, or 81 cents a share, compared with $45.8 million, or 66 cents a share, a year earlier.

Excluding a restructuring charge, it earned 86 cents a share.

Net sales rose 5 percent to $623.1 million. Organic sales grew 4.5 percent for the quarter.

Analysts on average were expecting earnings of 79 cents a share, before special items, on revenue of $612.9 million, according to Reuters Estimates.

"The organic sales growth was driven by consumer appeal for our high quality value-oriented products and premium priced new products, carryover benefits of 2008 pricing actions and a significant increase in marketing spending," CEO James Craigie said in a statement.

Gross margin rose to 45.2 percent in the quarter from 40.8 percent a year ago due to lower commodity costs, price increases, cost controls and higher margins on the sale of products related to the businesses acquired from Coty.

The company, which sells products under its Arm & Hammer brand, also raised its quarterly dividend to 14 cents a share from 9 cents.

For 2009, the company now expects earnings of $3.35 to $3.40 a share, excluding items, 5 cents higher than its previous outlook range.

"We expect the earnings per share to be evenly balanced over the remaining two quarters of the year," CEO Craigie said.

Church & Dwight expects organic sales growth of about 4 percent and raised its target for gross margin expansion in 2009 to about 350 basis points over 2008 levels. (Reporting by Amitha Rajan in Bangalore; Editing by Jarshad Kakkrakandy)