UPDATE 1-Finland's Outokumpu expects wider operating loss

Thu Jul 24, 2014 9:42am EDT

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HELSINKI, July 24 (Reuters) - Finnish stainless steel maker Outokumpu said it expected its operating loss to widen in the third quarter due to slow summer sales in Europe, sending its shares down more than 6 percent.

Outokumpu, which has been hit hard by Europe's economic slowdown and overcapacity in the industry, forecast its third-quarter underlying operating loss would be slightly larger than the 6 million euro ($8 million) second-quarter loss it reported on Thursday.

The second-quarter figure narrowed from 87 million euros a year earlier and was smaller than the 13 million euros average forecast in a Reuters poll of analysts.

Outokumpu shares were 6.4 percent lower at 6.90 euros by 1331 GMT.

"Maybe there was some optimism in the market after strong results from Acerinox," said Nordea analyst Johannes Grasberger.

Outokumpu's Spanish peer Acerinox earlier this week said its net profit jumped almost five-fold in the first half of the year due to improving demand.

Global stainless steel demand rose 0.9 percent in the second quarter compared with the previous quarter, but imports into Europe also rose, pressuring Outokumpu which is focused on that region.

Outokumpu, 30-percent owned by the Finnish state, earlier this year raised 640 million euros through a rights offering as part of a larger financing plan that included asset sales.

($1 = 0.7432 Euros) (Reporting by Jussi Rosendahl and Sakari Suoninen; Editing by Erica Billingham)

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