August 8, 2013 / 6:52 AM / in 4 years

UPDATE 2-Rautaruukki's firm outlook takes edge off weak quarter

* Q2 comparable op profit 17 mln euros vs 25 mln in poll

* Steelmaking unit’s op profit 8 mln euros vs 22 mln in poll

* Shares up more than 6 pct (Recasts with outlook and share reaction; adds analyst comment)

HELSINKI, Aug 8 (Reuters) - Rautaruukki stood by its full-year profit forecast, cheering investors who expected the Finnish steelmaker to succumb like rivals to persistent market weakness.

Shares in Rautaruukki rose 5.8 percent to 5.21 euros by 1250 GMT as wary analysts priced in an expected improvement in operating profit next year.

“The shares are not solely priced based on estimates for this year, but investors are starting to think about next year,” said FIM analyst Markus Liimatainen.

Austrian steelmaker Voestalpine said on Wednesday steel demand was finally stabilising, showing resilience to the downturn that has afflicted the $500 billion industry.

But German producer Salzgitter slashed its full-year outlook on Monday and the world’s biggest manufacturer ArcelorMittal also cut its outlook last week.

Rautaruukki on Thursday reported a second-quarter comparable operating profit of 17 million euros ($23 million), much less than the market’s average forecast of 25.3 million euros.

But it said it still expected full-year profit to improve, helped by cost cuts, while net sales would likely be flat compared with 2012.

Rautaruukki last year launched a 100 million euros programme of job cuts and also spun off part of its engineering business in response to weak steel demand and prices, especially in debt-stricken Europe.

Those efforts have helped it eke out an operating profit for the past two quarters despite a fall in sales.

The company’s steelmaking unit still struggled in the second quarter. Operating profit fell to 8 million euros from 13 million, hurt by technical problems.

Chief Executive Sakari Tamminen said customers were still highly cautious, holding off from purchases until the last minute. ($1 = 0.7508 euros) (Reporting by Terhi Kinnunen; Editing by David Cowell)

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