UPDATE 1-Weak bulk unit, costs drag FLSmidth below forecasts
(Adds details, quotes, share price)
* Q3 revenue 6.32 bln DKK vs average forecast 6.68 bln
* Q3 EBIT 528 mln DKK vs average forecast 647 mln
* Narrows 2012 EBIT margin outlook to 8 pct
* Shares drop 5.3 pct
COPENHAGEN, Nov 13 (Reuters) - Danish engineering group FLSmidth missed forecasts with a 6 percent fall in third-quarter operating profit, as its bulk materials unit slowed and it took steep one-off costs.
FLSmidth, which supplies engineering and machinery to the cement and mining industries, said it expected the outlook for bulk materials such as coal and iron ore to weaken in the short term, as mining companies focus on reducing capital expenditure.
"Miners are faced with increasing cost pressures as a consequence of declining ore grades," FLSmidth said in a statement on Tuesday.
Its shares traded down 5.3 percent at 0832 GMT, underperforming a 0.4 percent decline in the Copenhagen stock exchange's benchmark index.
Rising costs for energy, water and labour as well as declining commodity prices also helped put pressure on mining companies, FLSmidth said.
Its Bulk Materials unit, which accounted for 21 percent of group revenue in the third quarter, reported a 60 million Danish crowns ($10.2 million) operating loss in the quarter against a 67 million profit a year before.
Group earnings before interest and tax fell 6 percent to 528 million crowns in July through September, below analysts' average expectation of a rise to 647 million in a Reuters poll.
Costs such as sales, distribution and administrative, including non-recurring costs in connection with acquisitions, amounted to about 200 million.
Group revenue rose 23 percent to 6.32 billion crowns, lagging an average 6.68 billion estimate.
The group slightly narrowed guidance for its 2012 EBIT margin to 8 percent from an earlier forecast of 8 to 9 percent, but maintained guidance for consolidated revenue of between 25 billion crowns and 26 billion.
($1 = 5.8670 Danish crowns) (Reporting by Mette Fraende and Teis Jensen; Editing by David Holmes)