February 4, 2015 / 2:26 PM / 5 years ago

UPDATE 1-Stora Enso shares retreat after profit meets forecast

* Profit, dividend in line with market expectations

* Shares fall after boosted expectations (Adds analyst comment, background)

HELSINKI, Feb 4 (Reuters) - Finnish pulp and paper maker Stora Enso broadly met forecasts with a 38-percent rise in quarterly profit on the back of cost cutting, leading its shares to hand back some of their recent strong gains.

The world’s second-biggest producer of graphic papers such as newsprint, magazine and office papers, said on Wednesday its fourth-quarter core operating profit was 209 million euros ($239 million), higher than 190 million euros expected by the analysts, but including some one-off gains.

Stora proposed an annual dividend of 0.30 euros per share, unchanged from a year ago and in line with market forecasts.

Shares in the company fell 5.7 percent to 8.09 euros by 1415 GMT, though were still 9 percent higher than at the start of the year.

“I would argue that the numbers were actually in line with market expectations,” Cheuvreux analyst Mikael Jafs said.

Rival UPM-Kymmene earlier this week proposed a bigger-than-expected dividend, which somewhat lifted expectations for Stora’s dividend too, Jafs added.

Stora did not give a full-year guidance but forecast roughly flat sales and core profit for the first quarter compared with the fourth quarter.

“I think this will be quite a good year for Stora. This is a winner from a weak euro, and the weaker Swedish crown versus the euro is also working in their favour,” Jafs said.

$1 = 0.8739 euros Reporting by Jussi Rosendahl and Anna Ercanbrack; Editing by Mark Potter

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