French advertising group Havas SA's (HAV.FR) share price surged Tuesday as chairman Vincent Bollore said operating profit and pretax profit rose strongly in July from a year earlier and after better than expected results late Monday, prompting a series of analysts to upgrade the stock.

At 1230 GMT, Havas shares rose 13.5%, or EUR0.29, to EUR2.41. The stock had opened 10% higher after the company late Monday disclosed better-than-expected first-half and second-quarter data, and cut its debt.

Bollore told reporters and analysts Tuesday that pretax profit rose 40% in July from 12 months earlier. He didn't provide an operating result for the month, however, stressing that July is just one month and said he isn't yet able to forecast financial results for the full year, having previously said organic revenue would fall less than 10%. French industrialist Bollore is Havas' controlling shareholder.

Havas' closely tracked organic revenue fell 9.8% in the second-quarter hurt by lower ad spending during the economic downturn. Still that decline beat the 10.7% drop expected by five analysts polled by Dow Jones Newswires.

In the first half, the company's net profit fell to EUR40 million from EUR49 million, better than EUR25.3 million net profit expected by analysts. That decline was limited in part by lower financing charges. Revenue was down to EUR700 million from EUR755 million, however.

The company also noted it has been cutting costs, and at a meeting Tuesday with journalists and analysts Bollore said Havas doesn't need exceptional or supplemental cost-cutting programs.

"There was good news on two fronts," analysts at ExaneBNP Paribas said in an investor note, noting that the margin on earnings before interest tax, depreciation and amortization narrowed just 70 basis points to 10.2% in the first half, better than the 9% margin they had expected and wider than the around 8% forecast by the market. ExaneBNP also noted that the company cut debt by EUR150 million, easing fears of a working capital deterioration in 2009, they added. Exane upgraded Havas to outperform.

The company cut its net financial debt at June 30 to EUR179 million from EUR340 million a year earlier, helped by the redemption of a bond earlier this year, lowering its financing charges 60% in the first half.

Fortis analysts also upgraded their recommendation to buy from reduce, citing "significant new business wins," stronger than expected resilience of margins and the likelihood that the business cycle is bottoming out for ad agencies, among other factors.

Havas said Monday that it maintained its commercial momentum with net new business worth EUR813 million in the first half, surpassing its 2008 half-year average and not counting the most recent account wins such as Heineken in the U.S., AXA in the U.K. and Coty in France.

Company Web site: www.havas.com

-By A.H. Mooradian, Dow Jones Newswires, +33 1 4017 1740; art.mooradian@dowjones.com.