UPDATE 2-Australia's AMP profit disappoints, shares slip

(Adds CEO, analyst comments, share price)

By Denny Thomas and Victoria Thieberger

SYDNEY, Feb 14 (Reuters) - Top Australian pension administrator AMP Ltd (AMP.AX: Quote, Profile, Research, Stock Buzz) missed market expectations with a 10 percent rise in full-year profit, pushing its shares down 4 percent, but said it was well placed to weather fickle markets.

Shares in AMP, like many other companies leveraged to the stock market, have been sold off by investors on concerns about a prolonged economic downturn.

AMP, which manages about A$129 billion ($115 billion) , said its balance sheet was strong, with a low level of gearing, and that it had no direct exposure to risky subprime mortgages.

BT Investment Management portfolio manager Andrew Waddington said 2008 would be a more challenging year and there were signs that tougher markets were having some impact.

"It looks like there were some above-normal withdrawals from certain products, significant enough to lower the value of future earnings."

The company's shares fell as much as 4.4 percent, but recovered as the broader market rallied to trade 0.6 percent higher at 0341 GMT.

Months of market volatility has hurt sentiment for companies geared to stock markets because of falling investment returns, with AMP shares down 22 percent this year.