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BASF SE (BAS.XE), the world's largest chemicals company by sales, Friday predicted higher sales and adjusted operating earnings this year, driven by growth in emerging markets and recovery in mature markets as 2012 progresses.

The company expects total sales this year to exceed 2011's record level and continue rising in 2013, provided the crisis in the euro zone doesn't intensify and the upswing in North America continues.

"In the first half of 2012, we will likely not achieve the high levels of the first two quarters of the previous year. For the second half, we expect to surpass the levels of the same period of the previous year," Kurt Bock, BASF's chief executive, said in a statement.

Both sales and net profit for last year's final quarter beat analysts' predictions, as the company slimmed costs and raised prices during the recent slowdown. Revenue came in at EUR18.06 billion, up 10% from a year earlier. Net profit rose 2.8% to EUR1.13 billion.

Still, adjusted earnings before interest and taxes suffered due to the sovereign debt crisis, falling about 14% on the year to EUR1.51 billion, short of the EU1.53 billion analysts predicted.

"Customers were more cautious in their ordering, reduced their inventories and put off orders in expectation that the economy would decline and prices could possibly soften," the company said.

Lower margins as a result of weak demand and increased raw material costs burdened its two main divisions, plastics and chemicals. Although the company expects chemicals sales to be higher on the year in 2012, pressure on margins means it expects the division's earnings to be lower.

The sovereign debt crisis and market uncertainty also hurt earnings recently reported by peers. Dow Chemical Co.'s (DOW) and Saudi Basic Industries Corp. (2010.SA), or Sabic's, fourth quarter earnings fell short of expectations as the impact of the sovereign debt crisis hurt demand. E.I. DuPont de Nemours & Co.'s (DD) profit fell 0.8% in the fourth quarter due to weaker volumes.

BASF Friday warned uncertainties due to the sovereign debt crises, in particular in Europe and the U.S., will continue to dampen growth prospects in 2012, and said positive impetus for the chemical industry will again mainly come from emerging markets.

Analysts welcomed BASF's results, DZ Bank described both earnings and guidance as positive. Heiko Feber of Bankhaus Lampe attributed the positive sales and adjusted EBIT surprise to the oil and gas division, as Libya production resumed slightly more strongly than the market was expecting.

At 0806 GMT, BASF shares traded 2.4% higher at EUR66.15, while Germany's DAX traded up 1%.

Over the past 12 months, BASF shares have gained around 9% in value, outperforming the European Chemicals stock index, which has gained about 4.4%.

- By Harriet Torry, Dow Jones Newswires: +49 69 29725 511: harriet.torry@dowjones.com