UPDATE 2-Nestle sees emerging markets lift sales growth
* Nine-month sales up 4.4 pct; analysts expected 4.5 pct
* Sales 68.4 bln Sfr vs 69.3 bln Sfr in poll
* Confirms full-year guidance
* Shares up 1.4 pct
VEVEY, Switzerland, Oct 17 (Reuters) - Nestle said an improvement in emerging market demand helped to lift sales growth in the third quarter, reassuring investors worried by recent negative news from European peers Danone and Unilever.
The world's biggest food group and its rivals have been grappling with sluggish consumer demand in austerity-hit Europe, where prices for Nestle's products continued to fall, and a slowdown in many emerging markets.
But Nestle said on Thursday that it had seen a slight pick-up across all its markets, which helped to boost its share price by 2 percent in morning trade.
Underlying sales, stripping out the effects of foreign exchange, acquisitions and divestments, grew 4.4 percent in the first nine months of the year, helped by improvements in all three of Nestle's geographical regions - Asia, Oceania and Africa, Europe and the Americas.
That was slower than the 6.1 percent in the same period last year but slightly better than the 4.1 percent growth in the first half.
Analysts in a Reuters poll had expected growth of 4.5 percent.
In emerging markets, which account for about 45 percent of group sales, sales were up by 8.8 percent, against 8.2 percent growth in the first half.
"(Nestle's) third-quarter sales were fairly solid and somewhat dull. But after the 'excitement' of Unilever's Q3 reduced sales guidance, Danone's Q3 sales miss and full-year profit warning, and Nestle's disappointing year-to-date performance, that is probably all that Nestle's shareholders were hoping for," said Bernstein analyst Andrew Wood.
Unilever said last month that a further slowdown in emerging markets meant that underlying sales growth would be 3-3.5 percent in the third quarter, while Danone on Wednesday cut its full-year growth target to 4.5-5 percent in the wake of product recalls and a bribery scandal in China. Unilever publishes third-quarter results on Oct. 24.
Group sales at the maker of KitKat chocolate bars and Maggi soups rose to 68.4 billion Swiss francs ($74.7 billion), lagging a 69.3 billion franc estimate in the Reuters poll.
"We expect our continued growth momentum to enable us to deliver around 5 percent organic growth for the full year," the Vevey-based company, which also makes Nespresso coffee capsules and Purina pet food, said on Thursday.
Nestle had cut its 5-6 percent long-term goal in August and warned at the time that even the lowered guidance would be tough to reach.
"Nestle is reassuring after the events in the space with Unilever and Danone. Reiterating guidance is positive," Kepler Cheuvreux analyst Jon Cox said.
Nestle Chief Executive Paul Bulcke took an upbeat view of the general slowdown in emerging markets. "I see that rather as a positive, we're coming back to more sustainable levels," he told journalists and investors at the company's headquarters
Bulcke told investors two weeks ago that the company had drawn up a list of businesses to be improved or divested. Sources told Reuters that Nestle's PowerBar energy bar and Jenny Craig weight-management businesses were up for sale.
Italian newspaper La Repubblica reported on Thursday that Nestle had submitted an offer to buy Italy's Ferrero, the maker of Nutella chocolate spread. Ferrero denied it had received an offer. Nestle declined to comment.
Nestle's shares, which have gained about 4 percent this year, are trading at 17.2 times forward earnings, on a par with Unilever and at a small premium to Danone at 16.8 times.
They were up 1.4 percent at 0820 GMT, against a 1.2 percent rise for the European food sector index.