UPDATE 2-Publicis sees continued growth despite credit crisis

(Adds comments by CEO, analyst; share price)

By Gilbert Kreijger

PARIS, July 24 (Reuters) - French advertising group Publicis (PUBP.PA) reported higher than expected sales growth on Thursday and predicted further growth despite an expected fall in marketing spend in some areas, sending its shares up.

Publicis, the world's fourth-biggest advertising and marketing group, said in a statement it made half-year sales of 2.23 billion euros ($3.5 billion), giving an organic growth -- which excludes currency effects, takeovers and divestments -- of 5.4 percent.

Analysts, who closely watch organic revenue growth, had on average expected a rate of 5.2 percent and said the results and outlook were good. Publicis's organic growth rate was 3.1 percent over the whole of 2007.

Shares in Publicis rose as much as 2.6 percent and were up 1.2 percent by 0948 GMT, outperforming a 0.1 percent rise in the DJ Stoxx European media sector index .SXMP.

Publicis increased organic sales in all areas, including the United States, but it expected marketing investments to fall in some areas, citing the automotive and financial sectors, due to the credit crisis and rising commodity and food prices.

Publicis, which makes 42 percent of its sales in North America, joined U.S. rival Omnicom Group Inc (OMC.N), the world's biggest advertising group, in posting higher organic sales.

Earlier this week Omnicom said second-quarter sales grew 4.8 percent organically but added it had seen slower growth in the UK and Spain and it remained cautious about the U.S. economy.