* Q1 organic growth 1.3 pct vs consensus 2.9 pct
* Publicis targets 3.2-3.6 pct organic sales growth in 2013
* Publicis shares fall more than 5 pct
* CEO Levy sees improvement later this year in Europe
PARIS, April 15 (Reuters) - Advertising group Publicis said it expected the European market to recover laterthis year after posting weaker-than-expected underlying revenuegrowth in the first quarter, sending its shares sharply lower.
The group, which had in February warned that 2013 would bedifficult in Europe, said it had been hit by a sharp advertisingslowdown across the continent. Spending by pharmaceuticalcompanies was especially weak.
Organic sales growth, which adjusts for currency impact andacquisitions, was 1.3 percent in the first quarter, a slowdownfrom 3.9 percent in the fourth quarter of 2012 and short of anaverage market expectation of 2.9 percent.
Publicis, which competes with WPP and Omnicom, nevertheless maintained relatively bullish forecastsfor the year, saying it aimed for organic growth in 2013 ofbetween 3.2 and 3.6 percent and for margins to improve.
"I think things will improve in Europe, particularly in thesecond part of the year," Chief Executive Maurice Levy said,describing the first-quarter downturn in Europe as worrying butnot unexpected.
Sales were especially weak in traditional, non-Internetadvertising. Revenue fell by 13.1 percent in Spain, 11.3 percentin France, 6.1 percent in the UK and 4.8 percent in Germany.
China and the United States remained strong, however,posting 15.2 percent and 4.4 percent organic growthrespectively.
Levy said he expected the group's first-quarter performancein the United States to be a good indication of what wouldhappen for the rest of the year. North America accounts forroughly half of group revenue.
Shares in Publicis, which is the third-biggest globaladvertising agency by sales, closed 5.17 percent lower at 51.56euros. It was the biggest faller in the French blue-chip CAC 40index which was down 0.5 percent overall. The sharestouched a 13-year high of 56.66 euros on April 4.
Bernstein Research's Claudio Aspesi said Publicis'difficulties this quarter would not translate into a poor yearoverall, pointing out that the 2012 comparisons for the firstquarter were particularly challenging.
"We do not expect this quarter to be representative of 2013as a whole and do not think it should be cause (for) excessiveconcern," Aspesi wrote in a note.
WPP, the world's biggest ad agency, is expected topublish first-quarter results on April 26. Its shares were down3.5 percent on Monday.
UBS analyst Tamsin Garrity wrote in a note that the WPPsell-off was overdone, in part because the British-based grouprelied less on the pharmaceutical sector for sales thanPublicis.