UPDATE 2-Force Protection shares off after contract loss

* Sees 'relatively soft' Q2 oper profit

* Force Protection shares off 35 pct

* Oshkosh shares gain 23 pct (Recasts with analyst note, stock prices, Atlanta dateline)

ATLANTA, July 1 (Reuters) - Shares of Force Protection Inc (FRPT.O) fell 35 percent on Wednesday, a day after the armored vehicle maker lost a $1.1 billion contract to supply more than 2,200 blast-resistant trucks to the U.S. Pentagon.

Force Protection said it expects a "soft level" of second quarter operating profit, after its Force Dyamamics venture with General Dynamics Corp (GD.N) lost the bid to Oshkosh Corp (OSK.N). Other bidders included BAE Systems (BAES.L) and Navistar International Corp (NAV.N).

Shares of Oshkosh were up about 23 percent on Wednesday, while Navistar fell 1 percent. BAE Systems was down modestly in London trading, and General Dynamics was up 1 percent.

Sanford Bernstein analyst Douglas Harned said in a research note that the award to Oshkosh was an "incremental negative" for BAE Systems and General Dynamics, which are among the biggest contractors with the Pentagon.

But Harned added that one or both of the big contractors "could receive a benefit, albeit significantly smaller," from participating in the program as a subcontractor.

Collins Stewart analyst James McIlree downgraded Force Protection, based in Ladson, South Carolina, to "hold" from "buy."

"With M-ATV now removed from (Force Protection's) bucket of opportunities, we believe there is little else in the way of catalysts," McIlree wrote in a note to clients.

M-ATVs, or Mine Resistant Ambush Protect All Terrain Vehicles are lighter, more maneuverable versions of armored vehicles for use by U.S. troops in Afghanistan's rougher terrain.

In a statement on Wednesday, Force Protection said it expects "a relatively soft level of operating profit in its second quarter due to the timing of vehicle and other product shipments and costs related to the M-ATV competition."

But it expects a stronger second half and full year performance because of other business.

FBR Capital Markets analyst Patrick McCarthy wrote that while Force Protection's vehicle was believed to carry a lower initial price, concerns about its production capability and life-cycle costs may have derailed the company's bid.

Force Protection shares shed $3.10, or 35 percent, to $5.74 on Nasdaq. Oshkosh was up $3.41, or 23 percent, to $17.95 on the New York Stock Exchange, while Navistar was down 49 cents, or 1.1 percent, to $43.11. (Reporting by Karen Jacobs in Atlanta and Eric Yep in Bangalore; Editing by Derek Caney)