UPDATE 2-Petroplus targets deals despite weak outlook

* Q1 net loss $11.3 mln, vs forecast profit of $19 mln

* Underlying profit rises

* Still eyeing acquisitions

* Analysts concerned at cash drain, debt, guidance cut

* Shares down 1.4 percent

(Recasts, adds detail, background, analyst, share rise)

By Emma Thomasson and Tom Bergin

ZURICH/LONDON, May 7 (Reuters) - Petroplus (PPHN.VX), Europe's largest independent crude oil refiner, said it wanted to continue buying refineries despite a weak outlook for industry margins and an unexpected swing into the red in the first quarter.

However, analysts said Petroplus's positive underlying result was outweighed by concerns about the weak outlook and rising debt.

"Results above expectations but clouded by cash drain and guidance cut," analysts at Kepler Capital Markets said.

Cash and short-term deposits fell to $45.5 million at the end of the quarter from $209.8 million at the end of 2008.

Petroplus said a drop in the value of fuel inventories, after oil prices halved compared to the same period in 2008, led to a net loss of $11.3 million. A Reuters poll of eight analysts gave an average forecast for a net profit of $19 million.

Petroplus shares fell 1.4 percent to trade at 20.80 Swiss francs at 0749 GMT, compared to share rises for most of Europe's other independent refiners.

Underlying profits rose, due to firmer refining margins.

Chairman Thomas O'Malley said he expected refining margins to be weak in 2009, leading to lower earnings in 2009 than 2008, and that this would create buying opportunities.