UPDATE 2-Big 5 Sporting Q2 EPS tops view, sees strong Q3 profit

* Q2 EPS $0.22 vs est $0.15

* Q2 revenue $216.0 mln vs est $216.1 mln

* Sees Q3 EPS $0.27-$0.34

* Shares rise 7 pct after the bell (Recasts; adds conference call details, analyst comments, updates share movement)

By Viraj Nair

BANGALORE, Aug 4 (Reuters) - Big 5 Sporting Goods Corp (BGFV.O) reported a better-than-expected quarterly profit on tighter cost control and forecast third-quarter profit above Wall Street expectations, sending its shares up as much as 7 percent in after-market trade.

Big 5 Sporting has seen positive same-store sales so far in the third quarter and an improvement in product margins, as the retailer has benefited from summer weather in many of its markets, Chief Executive Steven Miller said on a conference call with analysts.

In the second quarter, the company -- which had seen negative same-store sales for the previous six quarters -- returned to marginally positive same-store sales, driven by improving traffic.

Despite a potential bankruptcy by CIT Group Inc (CIT.N) -- Big 5 Sporting's largest lender -- the company expects commitments from other lenders to be sufficient to fund cash requirements for at least the next year.

It reduced debt by about $31 million in the second quarter compared to last year.

Big 5 Sporting sees 2009 capital expenditure of $7 million, excluding non-cash acquisitions. It earlier expected $7 million to $9 million.

For the third quarter, the company expects to earn 27 to 34 cents a share, while analysts on average were looking for a profit of 23 cents a share, according to Reuters Estimates.

"It looks like the momentum is carrying into the third quarter," Stephens Inc analyst Rick Nelson said.

Big 5 Sporting's profit has topped market expectations for the past three quarters, as the sporting goods retailer has kept a tight lid on costs by controlling personnel and advertising expenses to contend with a soft sales climate.

For the second quarter, net income rose to $4.7 million, or 22 cents a share, from $1.7 million or 8 cents a share, a year ago.

Net sales increased 3 percent to $216.0 million.

Analysts on average expected the company to earn 15 cents a share, before special items, on revenue of $216.1 million.

"Top line sales and margins were close to our expectations but the upside (to earnings) came from expense control, reduced debt and interest expense," Nelson said.

The El Segundo, California-based company has 382 stores across 11 states in the western United States and sells athletic footwear and apparel, as well as outdoor and sporting equipment.

Shares of the company were trading up at $14.90 after the bell. They closed at $14.05 Tuesday on Nasdaq. (Editing by Anne Pallivathuckal)