UPDATE 1-UBS earns will be challenged for sometime: Oppenheimer

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Oct 6 (Reuters) - Earnings power of UBS (UBS.N) (UBSN.VX) will be challenged for sometime, said Oppenheimer & Co's Meredith Whitney, who slashed her third-quarter earnings estimates and widened her 2008 per-share loss view for the company.

"We expect the business environment to remain difficult due to a challenging global economic climate, deleveraging by institutional and private investors, slower wealth creation and lower capital markets activity," said the analyst in a note to clients dated Oct. 5.

Weak net flows into wealth management highlights that problems of the investment bank have hurt the wealth management business, she noted.

Whitney said the estimate cuts on UBS reflected an estimated $3.1 billion in total writedowns for the third quarter and a $2 billion gain on company debt, along with the firm's forecast for a small profit for the period.

Last week, UBS said it expected to report a "small profit" for the third quarter when it announces results on Nov. 4. It gave no figures on new writedowns, or on whether it has stemmed outflows from its wealth management arm.

The bank is the first to give indications about how it fared in the quarter, a period of unprecedented upheaval in the financial industry landscape.

Whitney forecast net writedowns of $1.5 billion for monoline exposures at UBS. She expects net write-downs to the U.S. sub-prime residential mortgage market to be $200 million and net writedowns for U.S. Alt-A residential mortgages of $400 million.

The analyst cut her third-quarter earnings forecast on the stock to 13 cents a share from 43 cents a share and widened her 2008 loss-per-share view to $5.23 a share from $4.89.

Whitney maintained an "underperform" rating on the stock, which closed at $19.95 Friday on the New York Stock exchange. (Reporting by Ramya Dilip in Bangalore; Editing by Anil D'Silva)