May 13, 2014 / 5:57 AM / 3 years ago

UPDATE 2-ThyssenKrupp raises annual operating profit forecast

* Now sees 2013/14 adj EBIT almost doubling vs 586 mln euros

* Sees sales up by medium to high single-digit percentage

* Posts first net profit in two years, boosted by one-offs

* Q2 adj EBIT 309 mln euros vs Rtrs poll avg 296 mln

* Shares rise 4 percent (Adds sales, background, share price indication)

May 13 (Reuters) - Germany's ThyssenKrupp raised its forecast for full-year operating profit on Tuesday as it cut costs and took back parts of a stainless steel business it had sold to Finland's Outokumpu.

It posted its first quarterly net profit in two years, beating analyst estimates thanks to one-off gains as it sells less profitable activities to focus on services and engineering.

Shares in ThyssenKrupp rose 4 percent, leading Germany's blue-chip DAX index higher.

ThyssenKrupp still expects a fourth straight net loss for the year to the end of September. But it expects progress in efforts to restore long-term profitability as it sheds businesses to reduce its exposure to the volatile steel sector.

It already generates more than 70 percent of sales from industrial businesses making products from car parts to elevators, submarines and fertiliser plants, compared with less than 60 percent when Chief Executive Heinrich Hiesinger took the helm three years ago.

The company said it now saw adjusted earnings before interest and tax (EBIT) almost doubling from 586 million euros ($806 million) in its fiscal year through to the end of September, compared to a previous forecast of about 1 billion.

Fiscal second-quarter sales rose 8 percent to 10.3 billion euros, above an analyst consensus of 9.9 billion and driven partly by inclusion of the Terni steel plant in Italy and the VDM alloy unit that ThyssenKrupp took back from Outokumpu.

The company said it now saw full-year sales rising by a medium to high single-digit percentage on a comparable basis, against a previous outlook for a medium single-digit increase.

Hiesinger has been faced with repeated setbacks. The company's deteriorating finances forced it to ask shareholders for cash, major deals have been only partially successful and compliance issues have emerged that were costly and embarrassing.

He tried to sell ThyssenKrupp's Steel Americas business but was able to find a buyer for only half of it - a processing plant in the U.S. state of Alabama - leaving it with a loss-making mill in Brazil.

He also unexpectedly announced in November that ThyssenKrupp would have to take back parts of stainless steel business Inoxum, which it had sold to Outokumpu almost a year earlier.

As part of that deal, ThyssenKrupp sold its stake in Outokumpu, incurring a negative effect of 235 million euros for the second quarter.

That loss was more than offset by one-off gains from the sale of the Alabama plant and the winding-down of U.S. unit Budd in a Chapter 11 process, helping ThyssenKrupp post a quarterly net profit of 269 million euros, more than double even the most optimistic analyst estimate in a Reuters poll.

$1 = 0.7270 Euros Reporting by Maria Sheahan; editing by Victoria Bryan and Tom Pfeiffer

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