UPDATE 2-E-House China shares rise on strong Q2 revenue outlook

* Q1 earnings per ADS $0.09 vs est $0.05/ADS

* Q1 rev nearly flat compared with year-ago quarter

* Sees Q2 rev above Wall Street estimates

* Shares rise 13 pct

By Biswarup Gooptu

BANGALORE, May 19 (Reuters) - Chinese real estate services company E-House China Holdings Ltd (EJ.N) posted a quarterly profit that handily beat market estimates, helped by a recovery in real estate transaction volumes, and forecast a strong second-quarter revenue, sending its shares up 13 percent.

For the second quarter, E-House expects revenue to be between $49 million and $51 million, above analysts' average estimate of $38.3 million.

"The outlook not only reflects the rebound in the (Chinese) market, but also the fact that E-House's partners, the developers, are specifically doing well," said Lazard Capital Market analyst Colin Sebastian, calling the outlook "strong."

He also said E-House was in a very competitive position when it came to its project pipeline.

"I think there's a lot of pent-up demand from the consumer's side and they have a lot of supply of housing coming on to the market. So, the combination of these trends is playing in their favour right now."

For new properties sold, total gross floor area increased 124 percent to touch 1.4 million square meters in the first quarter.

Total value of new properties sold over the same period was $1.5 billion, an increase of 88 percent over the prior-year period.

E-House, which was the first Chinese real estate services company to make its debut on U.S. exchanges, went public in August 2007, at a time when the subprime crisis started trickling in.

This year, in March, the Chinese Premier said China would take vigorous steps to stabilize the property market, hinting that real estate firms could receive government stimulus funds and loans from state-controlled banks.

Property accounts for almost a quarter of all investments in China, and developers have been banking on the Chinese government's recent calls to support the real estate sector.

Lazard Capital Market's Sebastian also said E-House's results could be seen as being indicative of some of the larger real estate markets in China.

For the latest first-quarter, E-House reported a net income of $7.1 million, or 9 cents per American Depositary Share (ADS), compared with 8.7 million, or 11 cents per ADS, in the year-ago period.

Excluding share-based compensation expenses, it earned 11 cents per ADS.

Revenue was nearly flat at $32.8 million.

Analysts on average had expected earnings of 5 cents a share, excluding items, on revenue of $32.2 million, according to Reuters Estimates.

Operating expenses rose for the quarter, with selling, general and administrative expenses up 31 percent at $19.9 million.

American Depositary Shares of the Shanghai-based company were up nearly 12 percent at $14.97 in afternoon trade on the New York Stock Exchange. They had touched $15.14 earlier in the session. (Reporting by Biswarup Gooptu in Bangalore; Editing by Gopakumar Warrier and Aradhana Aravindan)