* Q3 EBITDA of 1.33 bln euros vs f'cast 1.32 bln
* Keeps 2010 EBITDA, revenue targets
* Pressure in business segments offset by cost cutting
* Shares fall 1.56 percent in early trade (Adds analyst comment, detail, background, shares)
By Harro ten Wolde
AMSTERDAM, Oct 27 (Reuters) - Dutch telecoms group KPN said it saw "no sign of recovery yet" in its business markets due to the recession, but third-quarter operating profit was up slightly as the company managed to squeeze out costs.
KPN is one of the first telecoms groups to report third-quarter results. The telecoms sector is weathering the recession better than some, as it had greater scope to cut operating costs.
KPN's third-quarter operating profit was in line with average expectations, while revenue fell slightly short on weakness in its home business market.
Third-quarter earnings before interest, taxes, depreciation and amortization (EBITDA) was up 4.4 percent at 1.33 billion euros, in line with average analyst expectations of 1.32 billion euros in a Reuters poll.
Revenue dropped 5 percent to 3.33 billion euros ($5 billion), missing average expectations of 3.41 billion euros, with individual analysts' estimates ranging from 3.36 billion euros to 3.47 billion.
KPN felt the impact from the economic downturn, mainly in its business markets: "There is no sign of recovery yet."
"Customers postpone investment decisions leading to pressure on the order conversion rate, resulting in slower order intake," KPN said in a statement.
KPN's shares were down 1.5 percent at 11.86 euros at 0820 GMT, underperforming a flat DJ Stoxx European telecoms index.
"At first glance I have not seen any strange things," said analyst Nico van Geest at Amsterdam broker Keijser Capital.
"I'd say they are pretty unexciting, but that's what we look for from KPN results, so we're happy," ING analyst John Davies said. "Overall, a solid cash flow generator and a good start to the large-cap telco earning season."
KPN said revenue pressure from regulation measures and the impact of the economic downturn were compensated for by job and cost reductions and selective price increases.
"KPN's third quarter results show that our focus on EBITDA, free cash flow and market shares is paying off," KPN Chief Executive Ad Scheepbouwer said in a statement.
The former Dutch telecoms monopoly kept its outlook for EBITDA of more than 5.5 billion euros in 2010 and revenue of 13.6-13.8 billion euros for 2009 and 2010. ($1=.6650 Euro) (Reporting by Harro ten Wolde; Editing by Jon Loades-Carter and Rupert Winchester)