Updated

Nike Inc. (NKE), the world's largest athletic shoe company, Tuesday said its quarterly profit rose 15 percent on strong U.S. demand for its high-end athletic footwear, despite slowed growth in Europe and Japan.

But the company's shares fell from a New York Stock Exchange close of $88.48 to $85.59 in after hours trading on Inet after what analysts said was a weaker-than-expected growth of 2.5 percent for future global orders.

Despite "better than expected earnings, the future growth looks a little less robust than analysts had been expecting," said McAdams Wright Ragen analyst Jamelah Leddy.

The shoe and apparel giant, which faces increased competition in light of a pending merger between Adidas-Salomon and Reebok International Ltd (RBK), posted a fiscal 2006 second-quarter net profit of $301.1 million, or $1.14 per share, compared with $261.9 million, or 97 cents per share, a year earlier. Sales jumped 10 percent to $3.5 billion from $3.1 billion in the year-ago period, Nike said.

Wall Street analysts, on average, had been expecting earnings per share of $1.04, excluding items, on revenue of $3.4 billion, according to Reuters Estimates.

Worldwide orders for athletic footwear and apparel for delivery from December 2005 through April 2006 -- a key indicator -- increased 2.5 percent from a year earlier to $5.2 billion. Future orders in the United States grew 9 percent.

Nike said changes in currency exchange rates "significantly reduced" its future orders growth. Excluding the impact of currency changes, Nike said its future orders increased 7 percent.

European future orders declined 6 percent, while in the Asia Pacific region, they grew 2 percent. Currency changes negatively affected future orders by 8 percentage points in Europe and 7 percentage points in Asia, the company said.

"We knew Europe and Asia-Pacific (future orders) would be difficult, but not to the extent the company just reported," said Susquehanna Financial Group analyst John Shanley.

In a statement, Chief Executive William Perez said "strength in the U.S., China and Latin America (balanced) more challenging results in Western Europe and Japan."

The Beaverton, Ore.-based company has benefited recently from large retailers such as Foot Locker Inc. reallocating shelf space away from Reebok's offerings in favor of more trendy and expensive shoes, such as Nike's Air Force 1 or Puma AG's European-style footwear. Nike has also expanded beyond traditional athletic shoe stores into general merchandise chains and sporting goods stores, boosting U.S. sales.

Nike, trading at more than 15 times estimated 2007 earnings, is valued at a slight premium to the Standard & Poor's 500 Index, but below Reebok, which trades just over 17 times forward-looking earnings.