UPDATE 1-Fiat Industrial tops forecast as Iveco cuts costs

* Q2 trading profit 631 mln euros vs forecast 575 mln

* Iveco beats forecasts, cost cuts offset low volumes

* CNH beats expectations but disappoints on outlook

By Stefano Rebaudo and Lisa Jucca

MILAN, Aug 1 (Reuters) - Italy's Fiat Industrial beat forecasts with a 19 percent rise in second-quarter trading profit to 631 million euros ($777 million) helped by a solid performance at its U.S. farm equipment unit CNH and cost cuts at truck maker Iveco.

Analysts polled by the group had forecast trading profit for Fiat Industrial, which was spun off from car maker Fiat last year, of 575 million euros.

Iveco, the laggard among Fiat Industrial's units, turned in a trading profit of 127 million euros, well above expectations of 90 million euros as cost cuts offset lower volumes.

CNH's trading profit came in at 481 million euros, beating a 455 million euros forecast.

"This is a strong set of numbers. The big beat came from Iveco, showing that the company is taking positive steps towards cutting costs there," said Barclays analyst Michael Tyndall.

"CNH was good, but CNH has been consistently beating expectations," he added.

CNH, which is soon to be merged into Fiat Industrial, had disappointed some investors, however, by failing to raise its targets despite improved trading margins.

Shares in Fiat Industrial were up 0.38 percent in volatile trading.

Fiat Industrial said its net industrial debt was broadly stable at 1.96 billion euros at the end of June.

It confirmed a 2012 revenue target of about 25 billion euros, and forecast a trading profit of between 1.9 billion and 2.1 billion euros. It sees net income of about 900 million.