UPDATE 2-Newspapers hit SanomaWSOY's Q2 profits

(Adds analyst's comment, updates shares)

HELSINKI, July 31 (Reuters) - Nordic media house SanomaWSOY SWS1V.HE reported on Thursday a slightly lower than expected second-quarter profit as the slowing economy hurt its newspaper business and kiosk operations.

Operating profit fell to 98.5 million euros ($154 million) from 133 million euros in the same period last year. Analysts had on average forecast a profit of 102 million euros, according to a Reuters poll of 10 analysts.

The 2007 second-quarter operating profit included non-recurring capital gains of 34.2 million euros.

"The result was slightly below our and the market estimates," said Handelsbanken analyst Maria Wikstrom, but added performance at Sanoma's magazine unit was encouraging.

The division's underlying operating profit grew 13 percent to 46.6 million euros from April-June of last year.

"We see that the eastern European growth boosted the profitability in Q2 (in the unit) and that is expected to continue," Wikstrom said.

Shares in Sanoma were down 2.9 percent at 13.52 euros by 0920 GMT, when the DJ Stoxx European media sector index .SXMP was little changed.

The publisher of Finland's biggest daily and its biggest tabloid repeated that it expects a rise in its full-year operating profit, excluding major one-off capital gains.

It also said it sees 2008 sales growing, but at a slower pace than the 6.7 percent increase achieved last year.

The company also said it sees flat operating profit at its newspaper division, down from a previous estimate for a rise. But analysts said this was already expected as rising distribution and wage costs have been pressuring the firm's and its peers' profitability. (Reporting by Agnieszka Flak; Editing by Greg Mahlich)