UPDATE 2-Lagardere aims for upper end of 2009 guidance

* Aims to reach upper end of op. profit guidance range

* Stronger-than-expected publishing, cost control to help

* Sees Q4 sales drop less marked than that of 9 months

* Shares down 3.7 percent

(Adds CFO comments, analyst, shares)

By Dominique Vidalon

PARIS, Nov 5 (Reuters) - Lagardere (LAGA.PA) on Thursday cut the scale of probable losses in 2009, citing a stronger nine-month performance at its book publishing business and tight cost control. The world's biggest publisher of consumer magazines, sucg as Elle and Paris Match, said the sales decline would be less steep for the rest of the year than in the first nine months of 2009 due to more favourable comparables, mainly at the recession-hit press and broadcast operations.

"Because of the strong performance in book publishing and because of the cost cutting plans, we are very confident we will be in the upper part of the guidance, which means between 0 and minus 5 percent, not between 0 and minus 10 percent," Chief Financial Officer Dominique d'Hinnin told a call with analysts.

"We tend to believe the worst is behind us, what we are seeing right now is the beginning of a recovery in Asia, something we see at a retail level at Lagardere Services and Lagardere Sports," he added.

The group had guided for flat to 10 percent lower recurring operating income year-on-year for its publishing, sports and services divisions for 2009. The goal excludes the press and broadcast activities, pooled under Lagardere Active.

"For Lagardere Active, visibility remains very poor, and we can expect the downtrend seen in the third quarter of 2009 to continue, the group said in a statement. Nevertheless, the decline could be slightly less marked at the end of the year thanks to a more favourable comparative."

STRONG PUBLISHING, WEAK SPORTS

Sales fell 3.7 percent to 5.82 billion euros in the first nine months of 2009, which was slightly below the 5.875 billion euro consensus from a Reuters poll of eight analysts.

By 1231 GMT, Lagardere shares were off 3.77 percent at 30.7 euros, underperforming the European media sector .SXMP

"The books strength should be positive, though it raises questions over 2010 comparatives, while the lack of advertising improvement and weakness at sports could be slightly negative," Goldman Sachs said in a research note.

A global advertising downturn has hit the press and broadcast operations, with revenues down 19.1 percent in the nine months. Advertising revenues fell 25 percent, as a stabilising in the decline of international magazine sales did not offset a drop in magazine sales in France.

Didier Guillot, head of Lagardere Active, said 2009 cost reductions should be slightly higher than the 90 million euros initially planned. The group did not intend to sell U.S. magazines in the short term but could consider joint ventures in some markets for its magazines, CFO d'Hinnin said.

With a market capitalisation of more than 4 billion euros, Lagardere is the world's number two book publisher behind Britain's Pearson (PSON.L).

Publishing sales rose 8.3 percent in the nine-months despite tough comparatives in the third quarter, as successful Stephenie Meyer Vampire saga began in July 2008.

"It's amazing, we are internally surprised by how strong the performance is, we were expecting a decline in the sales numbers in the third quarter compared to last year, it was not the case," d'Hinnin said.

Prospects for publishing in the fourth quarter still looked good, given the publication in France of the last book of best-selling author Dan Brown, and the new Asterix book.

It was still possible that, despite tough comparables, the publishing division sales would rise in the fourth quarter, d'Hinnin said.

Sports was a disappointing spot, analysts said, as revenue fell due to tough comparables in the third quarter, a less favourable timing of sporting events and a slowdown in business in Europe. Sports was set for a tough end of year, due to tensions in the European media rights and sponsorhip markets. (additional reporting by Cyril Altmeyer)