* Cuts outlook to more than $7 bln from about $8 bln before
* Iron ore price assumption cut to $105/tonne from $120
* Q2 core profit $1.76 bln vs Reuters poll consensus $1.83 bln
* In line with consensus if $90 mln litigation charge added back
* Shares down as much as 6 percent (Adds CFO, shares, analyst comment)
BRUSSELS, Aug 1 (Reuters) - ArcelorMittal SA, the world's largest steelmaker, cut its forecast for earnings this year after lower than anticipated iron ore prices ate into the profit of its mining business, sending its shares down some 6 percent.
The company, which makes about 6 percent of world steel and is also one of the world's largest iron ore producers, making it a broad gauge for the health of global manufacturing, said it now expected yearly core profit to be "in excess of" $7 billion.
It previously gave a figure of about $8 billion.
The "smart" estimate of Thomson Reuters's StarMine, which weights analyst's forecasts according to past performance, had been at $7.5 billion for the company.
"The guidance cut is driven by mining. Even if no-one was expecting $8 billion, the new guidance appears a notch more cautious than the market had expected," said Commerzbank analyst Ingo Schachel, who has a "hold" rating and 11 euro price target.
ArcelorMittal shares fell as much as 6.3 percent to 10.655 euros, a two-and-a-half week low, making them among the weakest members of the FTSEurofirst 300 index of leading European stocks. The STOXX Europe 600 basic resources index was down 2.0 percent.
Chief Financial Officer Aditya Mittal told a conference call lower iron ore prices were the result of weaker than anticipated demand from China and increased supply this year.
To illustrate the weak price trend, spot Asian iron ore .IO62-CNI=SI has fallen nearly 30 percent this year, while ArcelorMittal and the big three iron ore miners - BHP Billiton , Rio Tinto and Vale - have been boosting output.
ArcelorMittal said it had adjusted its assumption for iron ore prices to $105 per tonne from $120 per tonne before and implying a second-half average of $100.
The group, double the size of its nearest steelmaking rival Nippon Steel and Sumitomo Metal Corp, nevertheless said its steel business was faring well and it had increased demand forecasts for Europe and the United States, which account for about two-thirds of its shipments.
"We remain cautiously optimistic about the global economy, and in particular the outlook for the developed world," Mittal said.
The United States, he said, was benefiting from strong automotive and machinery sector demand. U.S. manufacturing output rose 6.7 percent in the second quarter, while in Europe, car registrations rose 6.5 percent in the first half.
And the construction sector, which uses about half of the world's steel, was slightly improving.
The company retained its forecast that global steel consumption would rise by between 3.0 and 3.5 percent, with slightly lower growth in China, a modest decline seen in Brazil and a drop for Russia and surrounding states.
Russia only takes up about 2 percent of ArcelorMittal's steel, but its weakness removes a source of expected growth.
The International Monetary Fund last week slashed its global economic growth forecast and said risks from crises in the Middle East and Ukraine could further dent growth.
ArcelorMittal also sells less than 2 percent of its steel in China, but the country is both the world's largest steel producer and consumer, and growth there has supported both steel and iron ore prices.
The company reported second-quarter core profit (EBITDA) of $1.76 billion. Excluding a $90 million charge related to U.S. litigation, it was in line with the average $1.83 billion expectation in a Reuters poll of brokers. Last year, the figure was $1.70 billion.
ArcelorMittal maintained its forecast that steel shipments would be 3 percent higher this year than last, with iron ore shipments up some 15 percent after the ramp-up of capacity at its mines in eastern Canada. (Editing Robert-Jan Bartunek and David Holmes)