UPDATE 1-Hochtief Q3 pretax beats expectations

*Hochtief Q3 pretax profit 123.1 mln eur

*Analysts estimated Q3 pretax profit of 105 mln eur

*Reiterates profit outlook

*Raises outlook for 2008 new orders, order backlog

*Share rises 10.7 pct to 29.73 euros

(Adds details, background, share price)

FRANKFURT, Nov 14 (Reuters) - Hochtief (HOTG.DE), Germany's largest builder, said pretax earnings in the third quarter dropped 23 percent, less than the market expected. The share was the strongest riser on the German mid-cap index .MDAXI.

Earnings before taxes in the three months through September dropped to 123.1 million euros ($156.2 million), the Essen-based company said on Friday in a statement.

Nine analysts had on average estimated pretax earnings would drop 35 percent to 105 million euros after last year's earnings were boosted by a tax gain at Hochtief's stake in Hamburg airport and a special dividend from its Sydney airport.

The company increased its expectations for 2008 new orders and order backlog, saying it now expects both to rise compared to 2007, after previously forecasting they would be unchanged.

Hochtief reiterated it expects consolidated net income and pretax earnings to rise in 2008, without being more specific.

The share rose 10.7 percent to 29.73 euros, more than the 2.2 percent increase of the MDAX index .MDAXI and the 5.8 percent rise of the DJ Euro Stoxx Construction & Building Materials index .SXOP.

Hochtief has taken a first hit from the financial crisis, as its second-largest shareholder, Russian billionaire Oleg Deripaska, in October had to sell his 10 percent to finance other ventures.

Hochtief is struggling to convince investors of the value of its operations other than its Australian mining business Leighton (LEI.AX) such as airports, German construction and facility management.

Leighton is worth around A$7.8 billion on the stock market, according to Reuters data, so that the value of Hochtief's 55 percent stake represents more than the whole market capitalisation of Hochtief of 2 billion euros ($2.55 billion).

Hochtief shares have plummeted 70 percent in 12 months, more than the 49 percent drop of the DJ Euro Stoxx Construction & Materials index and the 43 percent drop of the German mid-cap index MDAX.

The company is valued at 10.3 times estimated 12-month forward earnings, more than competitors such as Germany's Bilfinger Berger (GBFG.DE) or France's Vinci (SGEF.PA), as some investors expect Hochtief's largest shareholder, Spain's ACS (ACS.MC), to take over the company.

ACS controls just under 30 percent of Hochtief. (Reporting by Peter Dinkloh)