UPDATE 2-GrafTech Q2 tops Street, sees Q3 lower than Q2

* Q2 adj EPS $0.31 vs est $0.28

* Q2 revenue up about 62 pct

* Shares down 3 pct (Adds details, updates share movement)

July 29 (Reuters) - Electrodes maker GrafTech International Ltd (GTI.N) posted quarterly results that beat Street estimates, helped by a jump in sales at its industrial materials segment, but said it sees third quarter to be lower than second quarter.

GrafTech, which makes graphite and carbon electrodes, expects the third quarter to be lower than the second quarter, citing a decline in graphite electrode volumes, partly in response to weaker demand associated with the normal European holiday season.

GrafTech, whose electrodes are used in the automotive, electronics, power and oil markets, gets its needle coke from suppliers such as Seadrift and ConocoPhillips (COP.N).

In April, GrafTech had said it will buy rival C/G Electrodes LLC and the rest of raw material supplier Seadrift Coke LP it does not already own, for a total of $692 million, to strengthen its presence in the graphite electrode market. [ID:nSGE63S0HW]

GrafTech said in statement that it continues to expect the two acquisitions to close in 2010.

Seadrift is the world's second largest manufacturer of petroleum-based needle coke. Needle coke is the primary raw material used for making electrodes.

The company said it continues to see operating income to be lower in the third quarter. For the second quarter, operating income rose to $39 million, up from $19 million from the prior year period.

Q2 TOPS

For the second-quarter, the company reported net income of $39.3 million, or 32 cents a share, compared with a net loss of $37.1 million, or 31 cents a share, a year ago.

Excluding items, it earned 31 cents a share.

Revenue jumped about 62 percent to $254.9 million.

GrafTech saw sales at its industrial materials unit rise 61 percent to $208.7 million, while sales at its engineered solutions unit jumped 65 percent to $46.1 million.

Analysts on average were expecting the company to earn 28 cents a share, before special items, on revenue of $235.7 million, according to Thomson Reuters I/B/E/S.

Shares of GrafTech were trading down 3 percent at $15.80 Thursday morning on the New York Stock Exchange. (Reporting by Fareha Khan in Bangalore; Editing by Prem Udayabhanu)