UPDATE 1-E.ON H1 profit beats market expectations

* E.ON H1 opg profit drops 1 pct to 5.7 bln eur

* Reuters poll avg for H1 opg profit was 5.5 bln eur

* E.ON shares indicated up 1.1 pct, outperforming mkt

(Adds shares, background)

FRANKFURT, Aug 12 (Reuters) - E.ON (EONGn.DE), the world's largest utility, on Wednesday reported earnings that beat market expectations, following strong results from major European peers such as France's EDF (EDF.PA) and Iberdrola (IBE.MC).

Adjusted earnings before interest and taxes (EBIT) dropped 1 percent to 5.7 billion euros ($8.08 billion) in the first six months of the year, the Duesseldorf-based company said.

That beat the 5.5 billion euro average of estimates from 14 analysts in a Reuters poll.

E.ON shares were indicated 1.1 percent higher at 0611 GMT according to Lang & Schwarz brokerage, more than the 0.4 percent increase seen for the German benchmark index DAX .GDAXI.

E.ON is trying to catch up with competitors as it struggles to earn money from 18 billion euros worth of acquisitions it made in Italy, Spain and Russia and raise its profitability to the level of peers.

E.ON shares are performing worse than those of other European energy providers as well as other German stocks and are valued lower than competitors such as France's EDF (EDF.PA) or Austria's Verbund.

E.ON's stock has dropped 33 percent in the past 12 months, while the DJ Stoxx utilities index dropped 30 percent and the German benchmark index DAX .GDAXI slipped 17 percent.

The power provider trades at 9.2 times estimated earnings per share for the coming 12 months, the 7th-lowest valuation among 33 European peers according to Thomson Reuters StarMine, which weights analysts estimates according to their track record.

The utility on Monday announced its deputy chief executive, Johannes Teyssen, will take over the helm of the company from May 2010.

German peer RWE is scheduled to report first-half earnings on Thursday and GDF Suez on Aug. 27. (Reporting by Peter Dinkloh)