The world's fifth biggest advertising group, Havas, has reported a huge jump in first quarter profits - despite a general slump in advertising spend in its key US market.

The French group, whose clients include Microsoft, electronics giant Philips and Peugeot/Citroen, was bullish about the current advertising market, which has been hit harder than most by the global economic downturn.

Unlike a number of its rivals in recent weeks, Havas said it saw no reason to issue a profit warning.

But the group, which doubled in size last September when it bought US Snyder Communications, was unwilling to offer a clear forecast for the rest of the year, due to "uncertain" market conditions in the US.

Analysts unhappy

Havas reported a 63.8% increase in first-quarter billings to 3.6 billion euros (�1.95bn) and a 60.2% gain in gross profit to 545.2 million euros (�336.04m).

But analysts were unhappy with the group's relatively modest organic growth of 7.9% for the quarter.

Havas shares shed 3.47% to 14.48 euros in early trading on Wednesday.

The advertising industry has been hit harder than expected by the sudden downturn in the US economy.

Among the big five agency groups listed on stockmarkets, only Omnicom has so far reported an increase in first quarter profits - up 16% - and organic growth of 13.8%.

Big clients have slashed spending on television and print ads and the lucrative stream of dot-com clients, which fuelled double-digit profit growth for some agencies, has dried up.

New business

Havas chairman Alain de Pouzilhac said there was "currently no reason" for Havas to issue a profit warning because "new business took off in April."

But he said he was unhappy with the outlook for advertising spending in the US.

"I think we have to be cautious today because of the lack of visibility in the American market, which represents around half the world market," he said.