UPDATE 3-Newell beats estimates, raises year view--stock up

* Q2 EPS ex-items $O.47 vs. Street view $0.35

* Lower input costs, cost-cutting efforts boost margins

* Q2 sales fell 17.6 pct

* Raises 2009 profit forecast, cash flow outlook

* Shares up 8 pct (Adds analyst's, CEO's comments, stock activity)

By Dhanya Skariachan

BANGALORE, July 30 (Reuters) - Consumer products maker Newell Rubbermaid Inc (NWL.N) posted a higher-than-expected quarterly profit on lower raw material costs and other cost cuts and raised its 2009 profit view.

The maker of Sharpie pens and Rubbermaid containers also allayed fears about its ability to pay down debt by raising its operating cash flow outlook for the year to about $500 million.

Shares rose almost 8 percent.

"This has been a major concern for investors over the past several quarters and we believe the extra breathing room will help quell remaining liquidity concerns," SunTrust Robinson Humphrey analyst William Chappell wrote in a note to clients.

Newell has cut jobs, froze wages and slashed its dividend as part of its cost-cutting efforts. It has even temporarily halted some production to reduce inventory levels.

Net income rose to $105.7 million or 37 cents a share in the second quarter, from $92.5 million or 33 cents a share a year earlier.

Excluding items, the company earned 47 cents a share, way above analysts' average forecast of 35 cents, according to Reuters Estimates.

Net sales at the company, whose other brands include Graco, Calphalon, Paper Mate, Waterman, Parker and Levolor, fell 17.6 percent to $1.50 billion.

Second-quarter gross margin was 37.1 percent, up 3 percentage points from last year, boosted by some planned product exits, lower raw material costs and pricing initiatives.

For 2009, Newell expects earnings of $1.15 a share to $1.30 a share before one-time items, up from its prior forecast of $1.00 to $1.25 a share.

Newell, however, sees net sales for the full year falling at the "unfavorable" end of the company's prior outlook range of a decline of 10 to 15 percent.

"We are expecting similar kinds of economic effects and consumption patterns for the balance of the year," Chief Executive Officer Mark Ketchum said in an interview.

Newell's stock was up 94 cents at $13.2O Thursday afternoon on the New York Stock Exchange.

Oppenheimer analyst Joseph Altobello said Newell "presents a nice play on an economic recovery in late 2009-2010," and added the brokerage would look to accumulate the consumer products maker's stock "opportunistically."

Altobello has a "perform" rating on the stock. (Reporting by Dhanya Skariachan in Bangalore; editing by Gerald E. McCormick and Derek Caney)