* CEO says ad markets stabilising, but no recovery signs yet
* Sees consolidation in media sector when recession over
* Says newsprint prices could fall next year
(Wraps separates, adds detail, share price)
HELSINKI, Oct 12 (Reuters) - Sanoma's main priority is preserving profitability as the advertising market has stabilised but has not yet shown any signs of recovery, the company's chief executive said on Monday.
Like other media groups, Sanoma, which is based in Finland but has operations across the Nordic region and Europe, has been hit hard as advertising plunges. It has forecast underlying earnings to fall this year.
"It's (the advertising market) not going up yet, but it's more stable than it has been ... (There are) no real signs of recovery yet," CEO Hannu Syrjanen told an investor meeting. "In the short term profitability is No.1."
Syrjanen said he expected to see more consolidation in the sector once the economy improved and Sanoma would consider acquisitions if it was in a strong position to fund them.
"I strongly believe that there will be consolidation after this recession, not only in television but also in other media sectors," he said.
"In the case there will be some good opportunities we are willing to consider (them) ... (but) it's not wise to spread the balance sheet to the maximum," he said. The head of Sanoma's news unit, which publishes Finland's largest daily newspaper Helsingin Sanomat, said the unit was on track to beat its cost-savings target of 30 million euros ($44.2 million) announced in May and costs would remain in focus in 2010.
Mikael Pentikainen added he was upbeat about the upcoming newsprint price negotiations for 2010, noting that more capacity was being built in places like the United Kingdom and the United States.
"I am quite optimistic (for) when the price negotiations (do) start," he said.
Asked if prices could fall next year, Pentikainen said: "I think that is possible."
Sanoma shares were 1.8 percent higher at 14.83 euros at 1102 GMT on a firmer DJ STOXX media index. ($1 = 0.6795 euro) (Reporting by Brett Young; editing by Karen Foster)