* Q3 net profit 17.1 million euros, vs forecast 25.4 million
* Cost-cutting drives year-on-year improvement in Q3
* No construction pickup in core CEE region expected
* Shares down 1.8 percent
(Adds background, shares, analyst)
By Sylvia Westall
VIENNA, Nov 3 (Reuters) - Austrian group Wienerberger said sluggish core markets would remain tough in 2011, after the world's largest brickmaker swung to a small third-quarter profit that missed expectations.
"I expect a continuation of the individual market trends up to the end of the reporting year," chief executive Heimo Scheuch said on Wednesday.
He gave no precise full-year outlook nor guidance for next year, saying he did not see any "notable improvement" in central and eastern Europe where Vienna-based Wienerberger makes around half its profit.
Wienerberger, which makes clay bricks and roof tiles, has been hit hard by the economic crisis because it is geared to residential construction which gained little from government stimulus spending.
Recovery this year has been driven by cost savings rather than improvement in the global construction market.
It posted a third-quarter net profit of 17.1 million euros ($24 million), an improvement from a 2.3 million loss in the 2009 period but missing all estimates in a Reuters poll in which the average forecast was 25.4 million..
Earnings before interest, tax, debt and amortisation (EBITDA) were 82.2 million euros, also below all forecasts.
Davy analyst Flor O'Donoghue, calling the third-quarter result disappointing, said: "What the figures imply is that it will be a big struggle for Wienerberger to meet (analyst) expectations for the full year".
Wienerberger was forecast to post 2010 EBITDA of 233 million euros ($327 million), according to Thomson Reuters I/B/E/S.
It shares were down 1.8 percent by 0915 GMT, underperforming the European construction and materials sector which was up 0.8 percent.
ING analysts had downgraded the stock to "hold" from "buy" on Tuesday, citing expected product price declines in all regions.
WEAK CEEU
Moody's said on Oct. 5 the remainder of 2010 and 2011 would be challenging for European building materials companies due to continued depressed demand in residential construction,
Scheuch echoed that on Wednesday saying the sector would face many challenges in 2011. "The decisive factor will be the development of consumer confidence in spite of the announced government spending cuts, uncertain economic development and high unemployment," Scheuch said.
Markets in the Czech Republic, Slovakia, Hungary and Southeast Europe were difficult in the third quarter, Wienerberger said while the downward trend in Romania and Bulgaria continued.
Only Poland showed some positive signs, with the declining demand for building materials levelling off. (Editing by David Cowell and Dan Lalor) ($1 = 0.7126 euro)