UPDATE 1-Gea Q2 operating profit lags forecast

* Gea Q2 EBIT 58 mln eur vs poll avg 66 mln eur

* New orders down 18.6 percent at 1.04 bln eur

* Says still cannot give outlook

(adds background, comment)

FRANKFURT, July 30 (Reuters) - Engineering group Gea (G1AG.DE) saw the declining trend in new orders stabilise in the second-quarter but refrained from giving a more precise outlook for 2009 after quarterly operating profit more than halved.

"I still do not see any basis for giving reliable guidance about GEA's business growth in fiscal 2009 due to the continuing high volatility in the markets," the company said on Thursday. Earnings before interest and taxes (EBIT) dropped to 58 million euros ($82.1 million), from 119.3 million, slightly lagging an average analyst forecast of 66 million euros.

The sales decline was worse than expected, with a 19 percent slide to 1.04 billion euros, compared with an average analyst forecast of 1.134 billion in a Reuters poll. New orders fell 18.6 percent to 1.04 billion euros.

One of the world's leading suppliers of cooling towers for power plants, Gea has seen a slump in demand as the economic downturn around the globe forced customers in marine, chemicals and beverage sectors to postpone or cancel investments.

Its Swedish rival Alfa Laval (ALFA.ST) had posted forecast-beating earnings in the second quarter while order bookings fell further than expected in March-June. [ID:nLG83021]

German engineering orders fell in May by 48 percent in real terms from the previous year, but less steep than the 58 percent fall seen in April in a sign the sector has yet to hit bottom, industry association VDMA has said. [ID:nL1710351]

It said it would not give a more detailed forecast other than to reiterate that this year's sales would be lower than in 2008 and margins would be negatively affected.

Gea trades at 10.6 times its forward 12-months earnings, a discount to 13.7 times of Alfa Laval at 11.4 and 13.2 of U.S. rival SPX (SPW.N), according to StarMine.