World Cup boosts Adidas profit

FRANKFURT, Germany -- Adidas-Salomon, the world's second-largest sportswear maker, posted an unexpected increase in profit as sponsorship of the World Cup powered sales.

Net income in the second quarter to June 30 rose 4 percent to 25 million euros ($24.22 million), while analysts polled by Reuters had expected a decline of 4 percent to 23 million euros. Sales rose 10 percent to 1.5 billion euros.

"These are very strong results at all levels and should result in a good performance for its stock," Madrid-based Merrill Lynch analyst Oscar Marcos told Reuters. "The World Cup has produced a big rise in orders in Asia, that looks really spectacular."

Asian sales leapt 26 percent to 539 million euros after the football World Cup was held on the continent for the first time. The company, which made the official football and sponsored 10 teams at the spectacle in Japan and South Korea earlier this year, said sales of football-related products soared 85 percent.

The company's stock rose 4.9 percent to 76.98 euros in early Frankfurt trading on Wednesday.

Chief Executive Herbert Heiner said the company was on track to meet its 2002 target of full-year earnings growth of 5 to 10 percent and at least 5 percent sales growth.

"With the majority of our expenses now behind us, we expect business to accelerate in the second half of the year. I am therefore pleased to confirm our 2002 financial targets," Heiner said.

Adidas stock got an additional boost from the company's order backlog, a key indictor of future revenues. Order backlogs rose 11 percent at the end of June -- their biggest rise in 15 quarters.

Its biggest rival Nike (NKE) reported a 7 percent jump in its order backlog in June.