April 28, 2011 / 4:45 PM / 6 years ago

UPDATE 1-St Gobain Q1 sales beat forecasts, keeps goals

* Q1 sales 9.799 bln euros vs Reuters poll 9.523 bln

* Keeps 2011 outlook

* Q1 l-f-l sales at Verallia packaging unit up 7.2 pct

(Adds details from statement)

PARIS, April 28 (Reuters) - Saint-Gobain (SGOB.PA), the world's largest building materials company, posted a stronger-than-expected 12.2 percent rise in first-quarter sales, helped by a recovering building sector in Europe and a mild winter.

The company, which competes with Owens Illinois (OI.N) and CRH (CRH.I) of Ireland, maintained its outlook for a double-digit percentage rise in operating profit this year and robust organic sales growth.

Saint-Gobain, which has been hit by the global slowdown in housebuilding, said Asia and emerging countries should continue posting robust growth, while in western Europe a recovery in the new construction and renovation markets should continue.

In North Amercia, industrial markets should see "brisk trading", but conditions in the construction sector remained "challenging", the statement said.

However, there should be signs of improvement by year-end.

Quarterly sales reached 9.799 billion euros ($14.54 billion), beating the average forecast for 9.523 billion in a Reuters poll of 10 analysts.

Like-for-like sales were up 9.6 percent at constant exchange rates.

"The volume upturn is now also driven by the rebound in residential construction and renovation markets in Europe, amplified by much better weather conditions than in first-quarter 2010," said CEO Pierre-Andre de Chalendar.

The company also kept its target to increase capital expenditure by 500 million euros this year and achieve free cash flow of 1.3 billion euros.

Saint-Gobain manufactures and distributes construction products such as pipes, ceramics and flat glass. Its materials were used to build the Louvre Pyramid in Paris and London's Gherkin tower.

Earlier this month, Saint-Gobain said its Verallia glass packaging unit had taken the first step to an initial public offering by filing documents with the French AMF regulator.

Verallia achieved a 7.2 percent rise in like-for-like sales in the first quarter.

Saint-Gobain shares closed up 0.34 percent at 47.16 euros on Thursday, giving the company a market value of 24 billion euros. The stock has gained 22 percent so far this year, outperforming the European construction sector .SXOP, which has risen 6 percent. (Reporting by Dominique Vidalon; Editing by Will Waterman)

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