Finland's second-biggest retail chain after S Group said total underlying operating profit from the quarter stood at 84 million euros (66.5 million pounds), flat from a year ago and surpassing analysts' average expectation of 80 million euros in Reuters poll.

Shares in the firm rose 2.9 percent to 28.45 euros by 0757 GMT.

Kesko's core operating loss at its home and specialty goods business widened to 7 million euros in the quarter from 2 million a year ago as recession-hit consumers cut spending or turn to online shopping.

There was no further information on the company's plan to sell some of its store sites to a new $1 billion real estate trust, aside from that Kesko said it is still looking to launch it this year.

"There should be investor demand for that as the real estate market remains active and interest level is low," said Rauli Juva, Nordea analyst.

"If this deal materializes, it should be a clear trigger for the stock. They will get around 0.5 billion euros in cash and could pay it all out, which could mean an extra dividend of 5-6 euros per share."

Juva said there were no obvious investment targets in sight for the company right now due to Russia's uncertainty. Kesko has in recent years expanded in the east, but in July it cut its estimates for sales growth in Russia.

The company forecast its total sales and core operating profit for the next 12 months to be at the level of the preceding 12 months.

(Reporting By Jussi Rosendahl; Editing by David Goodman and Louise Heavens)

By Jussi Rosendahl