UPDATE 1-RCS MediaGroup loss narrows on Q2 improvement

* H1 net loss 9.8 mln eur vs loss 65.1 mln eur year earlier

* Sticks to guidance of significant 2010 results improvement

* Shares up 3 percent, outperforms sector drop

(Adds details, background and shares)

MILAN, July 28 (Reuters) - Italian media firm RCS MediaGroup's (RCSM.MI) first-half net loss narrowed sharply, helped by stronger advertising sales growth in the second quarter and lower staff and operational costs.

The publisher of Italy's No. 1 selling daily Corriere della Sera and top sports paper Gazzetta dello Sport said even though its market improved it did not yet show a clear turnaround.

The company stuck to its guidance of a significant improvement in 2010 results from 2009, and said it achieved 98 percent of its 200 million euro ($260 million) cost savings target, according to a statement on Wednesday.

RCS MediaGroup, which is cutting costs and looking at asset sales to reduce its over 1 billion euro debt pile, said its first-half net loss narrowed to 9.8 million euros from 65.1 million euros a year ago.

Revenues edged up slightly to 1.10 billion euros from 1.09 billion euros a year ago, driven by a 5 percent rise in advertising sales which more than offset lower circulation sales.

RCS shares were up 3 percent by 1300 GMT while the DJ STOXX 600 media index .SXMP was down 0.7 percent.

(Reporting by Danilo Masoni; Editing by Michael Shields)