The Anglo-Dutch maker of Knorr soups and Dove soaps said it would raise prices in the fourth-quarter even as it aims for its goal of profitable sales volume growth for 2010.

Despite tough trading and heightened competition, the world’s third-biggest food and consumer goods group matched forecasts with a 3.6 percent rise in third-quarter underlying sales, but it was the margin rise that helped push the shares higher as analysts had looked for a small fall.

Chief Executive Paul Polman said he liked the tough trading conditions as it pressured Unilever to make sure it delivered on its key targets of growing ahead of its markets, see rising operating margins and strong cash flow.

“I am confident that in 2010 we will deliver against this model. But of course we need to demonstrate we can do so year in, year out - so there is much to do,” he told a investor briefing.

Unilever Plc shares were up 5.5 percent at 1,910 pence by 1202 GMT, to be the second biggest riser in the FTSE 100.

“Trading conditions have remained very difficult, but we believe Unilever is in much better shape than in the past,” said analyst Graham Jones at brokers Panmure Gordon.

Analysts said it was a decent performance given the pressures from higher commodity costs, and the increased competitive pressures from US giant Procter & Gamble (P&G for detergents, shampoos and skincare products.

“We think these results will go some way to restoring confidence in the company’s turnaround. We remain happy buyers this morning,” said analyst Martin Deboo at Investec Securities.

The group which makes Ben & Jerry’s ice cream, Sunsilk shampoo and Pond’s skin creams reported underlying third-quarter sales growth of 3.6 percent, in line with a company consensus of 3.7 percent, and compared with 3.8 percent in the first half.

It said third-quarter operating margins rose 20 basis points to 17 percent compared with a consensus of 16.6 percent and a year ago value of 16.8 percent, helped by cost savings of 1 billion euros so far this year.

Chief Executive Polman has led Unilever’s revival over his 22-month tenure raising spending, and cutting prices to drive sales volume growth, but now is having to push up prices to cover for commodity cost rises, and still keep volumes growing.

Unilever’s sales growth of 3.6 percent lags European food rivals such as Nestle, which showed third-quarter growth of 5.7 percent, and Danone, with 6.9 percent, while US peers P&G and Colgate Palmolive have cautioned over extra marketing spending and higher commodity costs..

Unilever’s underlying quarterly earnings rose 19 percent to 0.43 euros a share, just ahead of a consensus of 0.41 euros.

It proposed a quarterly dividend of 0.208 euro, in its first year of paying quarterly.