UPDATE 1-Australia's Boral sees year profit down 18 pct

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SYDNEY Oct 24 (Reuters) - Boral Ltd (BLD.AX), Australia's top building materials maker, expects full-year profit after tax to fall 17.7 percent, below analyst forecasts, on challenging market conditions and higher input costs, the company said on Friday.

The news sent its shares down as much as 5.5 percent, bucking a mild recovery in the broader market.

Boral forecast annual net profit at A$200 million ($134 million) in fiscal 2009, down from A$243 million in the past year to June. Analysts on average expect Boral's net profit to fall by about 9 percent to A$220 million.

In a speech to the group's annual meeting, Managing Director Rod Pearse said profits at its building products division in Australia would be significantly lower than in 2008, while the U.S. housing market would continue to weaken.

The group warned in August it expected a bigger operating loss at its U.S. operations this year due to the U.S. home-building slump, but said it expected increased earnings from its heavy construction materials business in Australia.

In its latest update, Boral said U.S. housing starts in 2009 were now expected to be 30 percent below 2008 starts, and 60 percent below the level of long-term underlying demand due to increased unemployment and recession fears.

On a more positive note, there was still strong demand for concrete in Australia.

Boral is considered a likely bidder for the Humes concrete pipes business in Australia, put up for sale by Mexico's Cemex (CMXCPO.MX), with the world's no.3 cement maker scrambling to sell assets to service debt and offset a slump in its markets.

Boral shares were down 3.9 percent at A$4.88 by 2350 GMT in a flat broader market.

Boral's shares have fallen only 12 percent so far this year, or about one-third as much as Australia's benchmark index .AXJO, as most of the poor outlook was factored in a year ago. ($1=A$1.49) (Reporting by Sonali Paul and Mette Fraende; Editing by James Thornhill)