* Q2 EBIT 65.9 mln euros vs 81 million avg in Reuters poll
* Sales slump 24 percent y/y
* Keeps 2009 outlook; says 2010 mkt visibility poor
* Says will not pay extra dividend
* Shares sink 6.7 percent
(Adds detail, quotes, updates share price)
By Eva Lamppu
HELSINKI, July 24 (Reuters) - Finnish engineering group Metso posted weaker-than-expected earnings for the second quarter on Friday, hit by low sales, and said the demand outlook remained grim, sending its shares down sharply.
Metso shares traded down 6.7 percent at 14.11 euros at 1407 GMT, underperforming a firmer Dow Jones Stoxx Industrial Goods & Services index.
April-June operating profit fell to 65.9 million euros ($93.56 million) from 155.2 million in 2008, well below analysts' average estimate of 81 million in a Reuters poll.
"Profitability was a hint weaker than consensus, but the most negative was that they didn't specify the outlook ... which was expected by now," said Jari Harjunpaa, analyst at Ohman.
Another Helsinki-based analyst, wishing to remain anonymous, said the share reaction was the only surprise in the results.
"The market had probably expected something extra -- the result to jump or an upgrade of the guidance," he added.
Metso, which makes equipment and services for the struggling paper and mining industries as well as the energy sector, said profits were hit by the sharp drop in sales and high costs in manufacturing and engineering units.
Second-quarter net sales fell 24 percent from a year ago to 1.25 billion euros, also lagging the mean analyst estimate of 1.33 billion.
"Based on the global economic recession and uncertain financial markets, we estimate that our business environment will continue to be demanding during the rest of the year," Metso said in a statement, adding visibility for 2010 was poor.
"Profitability weakened a bit everywhere ... but on the whole, considering circumstances, it is still on a satisfactory level," Chief Executive Jorma Eloranta told a news conference.
New orders in the quarter sank to 1.02 billion euros from 1.74 billion in 2008, just above the mean analyst estimate of 1 billion.
Eloranta said schedules for 800 million euros worth of orders, to be delivered after 2009, were being discussed.
"Naturally clients are interested in the current situation to postpone (orders), but ... I am quite confident that the orders will materialise," he said.
On Thursday, Nordic papermakers reporting second-quarter figures painted a grim picture of ailing demand in the sector and warned of more to come.
Metso repeated its full-year outlook, saying it expected satisfactory profitability in 2009, with annual net sales to exceed 5 billion euros -- down from 6.4 billion a year ago.
Eloranta said "satisfactory" for the firm was an EBITA margin above 5 percent.
Separately, the company said it would not pay an extra dividend for 2008, due to the uncertain market. (Editing by David Cowell)
($1=.7043 euros)