* Q2 adj EBIT 2.05 bln eur vs 2.12 bln poll avg
* BASF still sees slightly higher adj EBIT in 2014
* Says economic environment more challenging (Adds details and background on forex effect, CEO comment)
By Ludwig Burger
FRANKFURT, July 24 (Reuters) - BASF, the world'slargest chemicals maker by sales, became the latest euro zonecompany to suffer from the strength of the euro, postinglower-than-expected earnings growth even as sales volumes rose.
Second-quarter earnings before interest and tax (EBIT),adjusted for one-off items, rose 12.1 percent to 2.05 billioneuros ($2.76 billion), just short of the 2.12 billion euroaverage estimate in a Reuters poll of analysts.
"The devaluation of almost all major currencies against theeuro negatively impacted earnings by roughly 200 million euroscompared to the previous second quarter," Chief Executive KurtBock said on Wednesday.
"We expect something similar going forward so it's a realdrag on our performance," he told Reuters Insider TV an ininterview.
Sales and net income also narrowly missed consensusestimates, hurt also by an outage due to an accident at a Dutchplastics raw materials plant, run jointly with Shell,and by sluggish raw materials trading.
BASF shares were down 1.5 percent at 1100 GMT, compared witha 0.5 percent rise in Germany's blue-chip index.
The strong euro, up more than 5 percent against theU.S. dollar on average over the quarter, has proved a burden fora range of European companies.
German aircraft engine maker MTU Aero Engines blamed currency effects when it cut its sales target last week,while Frankfurt airport's operator has said the strongeuro was putting deep-pocketed overseas travellers off shopping.
BASF said it was hurt by the weakness of the U.S. dollar, Japanese yen and Brazilian real inparticular.
Earnings at the German group's core chemicals and plasticsbusinesses as well as at its oil and gas unit rose faster thananalysts had expected, helped by higher sales of petrochemicalsin North America and increased offshore oil production in Libya.
DZ Bank analyst Peter Spengler said the negative currencyeffects masked an otherwise good operating performance.
"The quality of the results is good, since chemicalbusinesses were strong," he said, keeping a "buy" rating on BASFshares.
The German group said that despite unfavourable currencydevelopments, it continued to target a slight increase inadjusted EBIT in 2014 but warned the economic environment hadbecome more challenging.
BASF reiterated it aimed to increase sales volumes excludingthe effects of acquisitions and asset sales but that revenueswould decline slightly due to the divestment of its gas tradingand storage business.
($1 = 0.7431 Euros) (Additional reporting by Angeline Ong in London and FrankSiebelt in Frankfurt; Editing by Maria Sheahan and Mark Potter)
