Puma said its order backlog at the end of 2004 was up 13 percent from a year earlier and forecast 2005 net income to grow by less than 10 percent. It said sales were expected to rise in the same range on a currency-adjusted basis.
Puma has started the past several years with a conservative forecast that it later increases, although analysts are concerned that the Bavarian firm may not be able to sustain its growth rates.
"Our fourth-quarter results provide us with a strong ending to another very positive year for Puma in which we established new benchmarks in sales and profitability," Chief Executive Jochen Zeitz said in a statement.
Shares of Puma, which fell more than 5 percent after the results, were up 2.1 percent at 194 euros by 1120 GMT.
"European order backlogs were good, the report is definitely positive," said Christoph Dolleschal, an analyst at Dresdner Bank, adding that Puma is expected to make an acquisition.
CONTINUED STELLAR GROWTH? Shares in Puma, which competes with Adidas-Salomon and Nike, have gained 21 percent in the past 12 months and have risen 13-fold in four years as profits have surged thanks to a boom in trendy sportswear worn outside the gym.
But the mid-cap stock is still trading cheaper than competitors, at a price-to-earnings (PE) ratio of 12 in contrast to Adidas with a PE of 16.7 and Nike of 21.40.
Adidas's 2004 net income jumped 21 percent but it disappointed investors with lower fourth-quarter earnings. It has forecast net income growth of 10-15 percent in 2005.
Dolleschal said if Puma does not make an acquisition then it is expected to distribute cash. The company has about 350 million euros in net cash, he said.
Puma increased its 2004 dividend to 1 euro a share from 0.70 euros in 2003. The company's shares fell more than 5 percent soon after it announced results as traders said some investors were not happy with the dividend increase.
One trader said he was expecting a dividend of 1.50 euros a share. The consensus was 0.95 euros.