UPDATE 3-Springer investments, restructuring to hit profit

* Sees 2013 EBITDA down by as much as 9 percent

* 2013 revenue to be up as much as 5 pct

* Posts FY EBITDA of 628 mln euros vs 619 mln expected

* Shares down more than 7 pct, underperform sector (Recasts, adds detail, analyst comment)

By Harro Ten Wolde

FRANKFURT, March 6 (Reuters) - German publisher Axel Springer has warned of a sharp drop in earnings this year, the latest sign that a slowing economy has finally hit advertising and circulations in Germany's print media.

Springer, which publishes Germany's top-selling daily "Bild", said on Wednesday the cost of investing in its digital businesses and restructuring its declining print operations would weigh on core earnings, or EBITDA, this year.

It said it expects EBITDA to drop by as much as 9 percent and foresees a significant drop in net income, sending its shares down more than 7 percent.

Until last year, Europe's largest print media market had proven relatively resilient to the technological and demographic forces that have squeezed newspapers in many other developed countries.

But late last year, publisher Gruner + Jahr (G+J), controlled by media conglomerate Bertelsmann, closed its Financial Times Deutschland (FTD) title, while left-leaning Frankfurter Rundschau had to be rescued by conservative rival Frankfurt Allgemeine Zeitung last week.

Springer CEO Mathias Doepfner said the company had no plans to cut jobs in its print business, adding that restructuring costs were part of a continuing search for efficiency improvements.

Springer is also spending more on its online activities, having been one of the first German companies to make a move into digital media and away from print.

"We continue to expect organic growth in our digital media, strengthened by acquisition effects, while the revenues of our national and international print media are expected to decline further, in line with market trends," the company said.

The group's digital media offerings - including web-based versions of its newspaper titles and stakes in property and job sites - last year contributed more than a third to Springer's top line, with revenue from digital rising 10.5 percent from last year to 1.3 billion euros.

The lower earnings outlook came despite a forecast that sales will rise by as much as 5 percent in the current year. The outlook was also a shock in light of analysts' expectations of a 4 percent rise in core earnings to 653 million euros ($850.6 million).

Yet the forecast of higher sales was slightly ahead of a previously predicted rise of 4 percent.

Axel Springer had also reported a 5.8 percent rise in 2012 EBITDA to 628 million euros, driven by its digital media, beating the average forecast of 619 million in a Reuters poll.

It said it would pay an unchanged dividend of 1.70 euros per share, which was lower than the 1.75 euros expected.

"The full-year 2013 guidance remains cautious," said Marcus Diebel, an analyst at JP Morgan. "Also, a flat dividend at 1.70 euros was disappointing."

Axel Springer shares were down 7.4 percent at 33.60 euros by 1300 GMT, among the day's biggest decliners in a European media sector which was up 0.2 percent. Trading volume in the stock was five times the 90-day average.

The shares are still up 4 percent so far this year, while sector peers have advanced 6 percent.

Still, Axel Springer shares trade at a dividend yield of 5.1 percent, which is higher than Pearson which trades at 4.0 and Reed Elsevier at 3.4 percent.

The shares price to earnings ratio is 11.8, below Pearson's 14.7 and Reed Elsevier's 13.7. ($1 = 0.7677 euros) (Additional reporting by Nadine Schimroszik; Editing by David Holmes and Roger Atwood)