* Q1 operating profit 1.91 bln euros vs 1.97 bln forecast
* Says mild winter, power sector crisis hit results
* Cuts 2014 EBITDA outlook to 6.4-6.8 bln euros vs 7.6-8.1 bln
* Adjusts outlook to reflect sale of oil and gas unit DEA
* Shares fall 1.3 percent (Recasts, adds details, background)
FRANKFURT, May 14 RWE, Germany's second-biggest utility, said first-quarter operating profit fell by almost a fifth, offering no prospect for a fast recovery from a power sector shakeup that has more than halved the company's market value in four years.
German utilities are grappling with the biggest ever upheaval in their business models, caused by weak demand for energy in Europe and a boom in renewable energy sources that are given priority access to power grids over their conventional gas and coal-fired power plants.
With its power plant business faltering, 116 year-old RWE is trying to transform itself into an energy service company by helping clients to save energy and expanding in renewables.
But that will take time. Analysts expect RWE's earnings to fall further over the next two years, according to Thomson Reuters data, before showing a slight recovery in 2017.
"We do not see 2014 to be the earnings trough," Deutsche Bank analysts wrote in a note, keeping a "sell" rating on the stock.
Shares in RWE were down 1.3 percent at 0850 GMT.
RWE's operating profit fell to 1.91 billion euros ($2.62 billion) in the first three months of the year, the Essen-based company reported on Wednesday, below the 1.97 billion average forecast in a Reuters poll of analysts.
"The crisis in the conventional electricity generation business led to further earnings shortfalls in the financial statements for the quarter," Chief Executive Peter Terium said.
"Furthermore, following the major cold spell a year earlier, winter temperatures were unusually high."
A day earlier, larger peer E.ON posted weaker-than-expected quarterly profits as mild temperatures reduced gas sales by nearly a quarter.
The crisis for conventional power producers was exacerbated by Germany's decision to shut down all nuclear plants by 2022 following Japan's Fukushima disaster and has cost RWE more than 20 billion euros in market capitalisation since 2010.
RWE adjusted its outlook for the current year, taking into account the disposal of oil and gas unit DEA, which it sold to Russian tycoon Mikhail Fridman in March in a 5.1 billion euro deal.
RWE said it now expects earnings before interest, tax, depreciation and amortisation (EBITDA) of 6.4 to 6.8 billion euros, operating profit of 3.9 to 4.3 billion and recurrent net income of 1.2 to 1.4 billion in 2014.
It had previously been aiming for EBITDA of 7.6 to 8.1 billion euros, operating profit of 4.5 to 4.9 billion and recurrent net income of 1.3 to 1.5 billion. ($1 = 0.7296 Euros) (Additional reporting by Hakan Ersen; Editing by Erica Billingham)