UPDATE 1-A. M. Castle Q2 profit falls, misses Wall Street view

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July 29 (Reuters) - Specialty metals and plastics distribution company A. M. Castle & Co (CAS.N) reported lower-than-expected quarterly profit, hurt by lower margins due to high material costs.

For the second quarter, the company earned $11.3 million, or 49 cents a share, compared with $16.4 million, or 78 cents a share, a year earlier.

Net sales rose about 7 percent to $397.1 million.

Analysts, on average, were expecting earnings of 66 cents a share, excluding items, on revenue of $402.4 million, according to Reuters Estimates.

"Material costs for carbon related products were significantly higher and combined with substantial increases in surcharges resulted in lower overall profit margins for the quarter," Chief Executive Michael Goldberg said in a statement.

A. M. Castle, based in Franklin Park, Illinois, said metals segment sales were up 6.4 percent at $365.4 million and average tons sold per day in the metals business rose 9.3 percent.

The company, which also supplies aluminium alloys to the aerospace and defense industries, said sales from plastic segment rose 8.2 percent at $31.7 million.

Shares of the company, which have lost about 11 percent of their value so far this year, closed at $24.18 Monday on the New York Stock Exchange. (Reporting by Sakthi Prasad in Bangalore; Editing by Jarshad Kakkrakandy)