UPDATE 2-Mexico's Cemex profit falls, sales stabilize

* Cemex reports bigger-than-expected fall in profit

* Sales stabilize compared to second quarter (Adds quarterly comparisons, competitor names, bylines)

By Robin Emmott and Gabriela Lopez

MONTERREY, Mexico, Oct 27 (Reuters) - Mexico's Cemex, the world's No. 3 cement maker, reported a bigger-than-expected fall in third-quarter net profit on Tuesday but its sales signaled the company may be ending its long slump.

Cemex (CX.N) (CMXCPO.MX) earned $121 million in the quarter, a 40 percent fall compared to the same period a year ago. Seven analysts polled by Reuters expected Cemex to earn $182 million between July and September of this year, versus $200 million in the third quarter of 2008.

But the fall in net profit was not as great as in previous quarters and Cemex said it saw signs of improvement in some of its markets, notably the United Kingdom.

While net sales in the period dropped 27 percent compared to the third quarter of 2008 and key markets such as Spain and the United States were very weak, net sales were similar to the second quarter this year at $4.2 billion.

Earnings before interest, tax, depreciation and amortization (EBITDA) fell 38 percent to $806 million compared with the third quarter of 2008 but were similar to the second quarter of 2009.

In a rare bright spot for Cemex in Europe, EBITDA rose 24 percent to $22 million in the third quarter in the United Kingdom versus the same period a year ago.

"We are encouraged by the quarter to quarter stability exhibited by our results," said Hector Medina, Cemex's executive vice president of finance and legal, in a statement. "Leading indicators in several of our markets are showing signs of improvement," he added.

The company, which bought Australia's Rinker in 2007 just as the U.S. housing crisis hit, has seen its cement and ready-mix sales plummet in Mexico, the United States and Europe as the global economic downturn slashed construction spending.

But Monterrey-based Cemex convinced its creditors to refinance $15 billion in bank and bondholder debt in August, putting an end to months of investors' concerns about the company's ability to pay its debt and avoid default.

Cemex, which operates in 50 countries and competes globally with Switzerland's Holcim (HOLN.VX) and France's Lafarge (LAFP.PA), has until February 2014 to pay its debt.

Cemex said it cut its net debt by $1.2 billion during the third quarter to $17.1 billion. (Reporting by Robin Emmott and Gabriela Lopez; editing by Carol Bishopric)