UPDATE 2-Tractor Supply sees strong Q2 profit on cost cuts

* Sees Q2 shr $1.48 to $1.50 vs. est $1.24

* Raises '09 profit view, cuts rev view

* Says to opt for direct marketing

* Shares up as much as 11 pct (Adds details, analyst comment)

By Viraj Nair

BANGALORE, July 8 (Reuters) - Tractor Supply Co (TSCO.O) forecast second-quarter profit above market expectations and raised its full-year earnings outlook as tighter control of marketing expenses offset a weak sales environment sending the retailer's shares up as much as 11 percent.

The farm and ranch supplies seller, which expects the macroeconomic and consumer-spending outlook to remain challenging over the year, will now pursue direct advertisement through mail and other avenues, instead of television.

Tractor Supply's direct advertising policy is "more efficient" as it eliminates the negative return on television advertisement, Wedbush Morgan analyst Joan Storms told Reuters.

Pressure on sales of big-ticket items is expected to be offset by the shift in advertising policy and higher store traffic, Storms said.

The company said it saw a 460 basis points increase in comparable customer transactions and a drop in per-store inventory level during the second quarter.

Tractor Supply, whose quarterly same-store sales dipped 2.7 percent, may see positive comparable store sales by the fourth quarter, Storms said.

The company said it sees 2009 sales at stores open at least a year to be flat to down 2 percent and trimmed its sales view for the period to $3.15 billion to $3.25 billion, from its prior estimate of $3.2 billion to $3.3 billion.

However, it lifted its profit projection for the period to $2.78 to $2.92 a share, from $2.58 to $2.74 a share.

Analysts were expecting the company -- whose competitors include Home Depot Inc (HD.N) and Sears Holdings Corp (SHLD.O) among others -- to earn $2.64 a share, before special items, on revenue of $3.22 billion in 2009, according to Reuters Estimates.

STRONG Q2 PROFIT

For the second quarter, Tractor Supply said it expects to earn $1.48 to $1.50 a share, ahead of analysts' average estimate of $1.24 a share.