March 4 (Bloomberg) -- Porsche SE, maker of the 911 sports car, boosted first-half profit 44 percent on deliveries of a new Cayenne sport-utility vehicle and an increased stake in Volkswagen AG.

Net income in the six months ended Jan. 31 rose to 1.3 billion euros ($1.97 billion) from 897 million euros a year earlier, Stuttgart, Germany-based Porsche said in a statement today. Revenue advanced 14 percent to 3.49 billion euros, with operating profit matching that increase, it said.

Porsche doubled deliveries of the revamped Cayenne, lifting group sales 19 percent, and sold more vehicles in China and Russia. The company, which aims to own more than 50 percent of Volkswagen, said today it adjusted earnings to take into account the effects of increasing the stake to 31 percent, as well as hedging options on the stock purchases.

``The main point to me is that Porsche's core operating profit increased at least as much as sales, which is clearly a positive development,'' Juergen Pieper, an analyst at Bankhaus Metzler in Frankfurt with a ``buy'' recommendation on the stock, said from the Geneva International Motor Show. ``That's largely the result of the new Cayenne, as well as sales in emerging markets such as Russia.''

Porsche fell 27 cents, or 0.2 percent, to 115.93 euros. The stock, which underwent a 10-for-1 split yesterday, has fallen 15 percent this year.

While Porsche has cut U.S. inventories to prepare for a possible economic slowdown, three new models and demand from newer markets should spur sales in the year ending July 31, producing a result prompting ``tears of joy,'' Chief Executive Officer Wendelin Wiedeking told investors on Jan. 25.

`Going Strong'

``Porsche is still going strong,'' the company said today. Pretax profit increased 24 percent in the half to 1.66 billion euros, the carmaker said.

Earnings figures were adjusted for the effects of the expanded Volkswagen stake, hedging transactions related to options on the stock and year-earlier profit that Wolfsburg, Germany-based Volkswagen, Europe's biggest carmaker, published after Porsche's reporting period closed. Income from the hedging added 850 million euros to profit in the half, compared with a 791 million-euro gain a year earlier.

``It is very difficult to determine the profit that actually comes from Porsche itself,'' Bankhaus Metzler's Pieper said. ``The vast majority of earnings come from extraordinary effects and from VW.''

Porsche is developing a hybrid-powered version of the Cayenne and spending 1 billion euros on a four-door sports sedan called the Panamera, for which it's targeting 20,000 sales a year. It's counting on new models such as the Cayenne GTS, 911 Turbo Cabriolet and 911 GT2 to help sales this year.

911 Sales Fall

First-half deliveries rose to more than 46,600 cars and SUVs, Porsche said in January. Cayenne sales increased to 20,340 vehicles. Deliveries of the 911, the $190,000 GT2 version of which can exceed 200 miles (320 kilometers) per hour, slipped 5.6 percent to 16,360 cars. Sales of the less costly Boxster dropped 17 percent to 9,900 cars.

North American sales advanced 11 percent to 16,200 vehicles in the first half, while German deliveries rose 3.7 percent to 5,700. Sales outside those areas climbed 28 percent to 24,700, boosted by growth in China and Russia.

Porsche started buying stock in Volkswagen in September 2005 and offered 35.9 billion euros, the lowest legally permitted amount, for full control in March 2007 after its holding breached 30 percent.

The offer expired on May 29, leaving Porsche with the largest stake. Volkswagen's second-biggest investor is the German state of Lower Saxony with about 20 percent. Porsche said yesterday that it eventually plans to own more than 50 percent.

To contact the reporter on this story: Jann Bettinga in Frankfurt at jbettinga@bloomberg.net.

Last Updated: March 4, 2008 12:24 EST