PARIS, Feb 14, 2008 (AFP) - French cosmetics giant L'Oreal said on Thursday February 12th it expects further improvement in its earnings this year as an expected slowdown in the key North American market is offset by emerging country demand.

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Chief executive Jean-Paul Agon said he was confident in the company's ability to deliver further gains after L'Oreal announced a 28.9-percent jump in 2007 net profit to 2.66 billion euros (3.88 billion dollars).

Stripping out exceptional items, net profit was up 11.2 percent at 2.04 billion euros, ensuring double-gigit earnings per share growth to 3.36 euros for a 23rd consecutive year.

Analysts had forecast earnings per share at 3.39 euros and the outcome caused a sharp drop in the share price which was down 4.58 percent to 82.63 euros in early afternoon trade as the overall market gained 0.82 percent.

Agon said that against a turbulent economic backdrop, "very strong growth in the emerging markets should compensate for likely weakness in North America.

Russia, China, Brazil, India and the countries of eastern Europe offer "an historic opportunity," he added.

Such emerging markets accounted for 29.3 percent of sales ini 2007 and 65 percent of the increase in sales.

Agon said he did not believe recent economic turmoil would impact the cosmetics market too much and it should continue to grow at a fairly steady pace after 5.0 percent in 2007, 4.9 percent in 2006 and 3.8 percent in 2005.