UPDATE 1-Linde Q1 op profit down 10.6 pct, speeds cost cuts

* Linde accelerates cost-cutting programme

* Says further capacity adjustments needed

* Says additional adjustment to cost 70 mln eur

(Adds background, CEO comment)

FRANKFURT, May 5 (Reuters) - Industrial gases maker Linde (LING.DE) reported a 10.6 percent decline in first-quarter operating profit as steel and chemical plants cut their output and manufacturing customers delayed projects to build factories.

It said on Tuesday operating profit -- defined as EBITDA excluding one-off items -- fell to 538 million euros ($712.2 million) from 602 million, just below an average estimate of 545 million euros in a Reuters poll of analysts.

Linde said it would accelerate a programme that had originally aimed to slash 650-800 million euros in costs over the next four years, starting this year.

It also said further capacity adjustments were needed and these adjustments would cost around 70 million euros.

Linde said it expected 2009 sales and earnings to fall.

"Our positive scenario -- group sales and earnings on the same level as in 2008 -- has become less likely in the light of the further deterioration of the economic outlook," Chief Executive Wolfgang Reitzle said.

The Engineering division's operating profit fell to 45 million from 47 million due to lower capital spending by industrial customers and their postponement of projects.

Linde trades at 12.2 times forward 12-month earnings, compared with rival Air Liquide's AIRLQ.UL 13.8 and Praxair's (PX.N) 18.0, according to Thomson Reuters StarMine, which weights analysts' estimates according to their track record.

Analysts have said Linde was still doing well relative to peers because its long-term supply contracts secured business, and because its cylinder gases business was likely still seeing robust demand from the healthcare and food industries.

Linde's Gases division, whose oxygen and nitrogen sales generate 75 percent of group revenues, posted first-quarter operating profit of 546 million euros, down 6.8 percent. (Reporting by Marilyn Gerlach, Editing by Michael Shields)