UPDATE 1-Havas shares surge as 2007 sales beat forecasts

(Rewrites with analysts comments, upgrades, share reaction)

By Dominique Vidalon

PARIS, Feb 14 (Reuters) - Shares in Havas (EURC.PA), the world's sixth-largest advertising group, rose more than 6 percent on Thursday after it posted forecast-beating 2007 sales.

The performance, which reflected new client gains and a strong showing from its digital and media buying businesses, led several analysts to raise their ratings on the stock.

Havas, whose chairman and main shareholder is French financier Vincent Bollore, said its 2007 revenue reached 1.532 billion euros ($2.23 billion), up 4.1 percent over 2006, at current exchange rates.

This was above the 1.512 billion euros targeted by a poll of 15 analysts by Reuters Estimates.

Closely watched underlying revenue growth, which excludes currency changes, acquisitions, and divestments, reached 7.1 percent in full-year 2007, beating the group's guidance for sales growth at the high end of a 5-6 percent range.

Havas's performance also outpaced that of larger domestic rival Publicis (PUBP.PA), whose underlying growth was 3.1 percent last year.

Havas shares were up 6.44 percent at 3.14 euros in early afternoon trade, outperforming Publicis which was down 4.82 percent at 23.08 euros.

In the fourth quarter alone, underlying growth at Havas accelerated to 9.8 percent from 9.3 percent in the third quarter.

Havas did not give any earnings guidance in its statement.

However, several analysts said the sales data reassured them over the group's outlook.

"This excellent report reinforces our 2007 margin forecast of 11.2 percent and clearly bolsters confidence in the prospects for 2008 despite the economic slowdown," Oddo Securities analysts said in a note. They raised Havas to "buy" from "reduce".

Exane BNP Paribas also raised Havas to "neutral" from "underperform".

In September, Havas guided for a 2007 operating margin of 10.5 percent to 11.2 percent. It unveils its 2007 earnings in March.

For the first time since 2000, the group reported growth in all regions and strong growth in all its businessees such as the Euro RSCG advertising network. (Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta and Quentin Bryar)