UPDATE 2-Bertelsmann looks at costs after weak ads hit Q1

* Says Q1 sales down 8 pct, EBIT down 54 pct

* Posts net loss

* Still sees 2009 sales, EBIT lower, but no details

* Plans to focus on cost savings

(adds detail, background)

By Nicola Leske

FRANKFURT, May 12 (Reuters) - Bertelsmann [BERT.UL], Europe's largest media group, hopes to mitigate declines in sales and earnings this year with strict cost savings as falling advertising revenues led to a first-quarter net loss and shaved almost 8 percent off sales.

The owner of broadcaster RTL AUDK.LU and publisher Random House on Tuesday reiterated it expected 2009 sales and operating profit to fall from last year's level but did not give more details.

"The degree of year-on-year change will depend on the intensity and duration of the economic downturn," it said.

Bertelsmann said it now planned to focus on cost cuts to minimise the impact of the economic crisis on the the group.

Chief Executive Hartmut Ostrowski said in an interview with German daily Frankfurter Allgemeine Zeitung earlier this month that the company had launched the biggest cost saving programme in its history.

"The sluggish advertising market has made our magazines thinner. TV series have fewer interuptions from commercials," Ostrowski told the paper and added that on average ad markets had dropped around 10 percent.

"We need to react to that," he said.

Bertelsmann said earnings before interest and tax (EBIT) in the first three months fell by more than 50 percent to 115 million euros ($156.5 million) on sales of 3.5 billion.

The Guetersloh-based company posted a net loss of 78 million euros compared with a net profit of 35 million a year earlier.

The company generates around 30 percent of revenue from advertising.

Chief Financial Officer Thomas Rabe said in March, when the company posted annual results, that a full-year loss was unlikely but that he did see the risk of writedowns.

Ostrowski was less confident.

He told FAZ that while an operating loss could pretty much be ruled out he was not so sure about a net loss in 2009.

"For the bottom line, I wouldn't go out on a limb but of course we are striving to reach a positive post-tax result."

Last week, its pan-European broadcaster RTL downgraded its expectations, saying it now expected profit to be considerably lower than in 2008 as advertising budgets continue to be trimmed amid recession and rising unemployment across Europe.

Bertelsmann gave one glimmer of hope, saying that it will see a positive impact in its service business, Arvato, as companies increasingly look to outsource services to cut costs.

Arvato has become the group's fastest-growing business, branching out from media-related services into call centres, financial clearing houses and mobile services.

Bertelsmann has been controlled by the Mohn family for the past 100 years and has opted to remain private, going so far as to take on additional debt to buy out Belgian investor GBL LAMBt.BR and prevent its own public listing in 2006.

Bertelsmann said debt stood at 6.72 billion euros by the end of March, compared to 6.63 billion at the end of 2008. ($1=.7349 Euro) (Reporting by Nicola Leske, editing by Knut Engelmann and Hans Peters)