Posting a third-quarter operating loss of 47 million euros(37 million pounds), exacerbated by a 50 million euros provision to settle a fine from French competition authorities, the mail and transport group said it did not expect much relief through the rest of the year.

Its comments could have a broader economic significance given the logistics sector is seen as a leading indicator for the state of the economy, being sensitive to companies' forward planning and stock purchases.

"If you look at our core countries in western Europe - the UK, France, Italy, Germany, Benelux - we see a challenging environment," said Chief Financial Officer Maarten de Vries.

"We see increased competition, especially in our domestic markets of the UK, France and Italy, as well as price pressure in those markets," de Vries said, adding that the company needed to catch up on investments to improve its competitiveness.

TNT said it was boosting investment to improve service quality and regain market share that had been lost to competitors in core markets, but said conditions in its home markets in Europe would remain flat in the last quarter of 2014.

Results in Asia, the Middle East, Africa and its domestic business in Brazil however would post "significantly" better full-year results than in 2013, the company said.

De Vries said investments already underway, which involve shedding jobs and investments in the company's European road network, would transform the company over the next five years, helping it regain lost market share.

He said there would be no need for further provisions to meet the French regulator's fine, which relates to alleged anti-competitive behaviour in the French parcels sector.

SLUGGISH GROWTH

Shares in the company were down 7.2 percent at 4.481 euros by 0842 GMT, not far from a more than one-year low of 4.283 euros set on Oct. 16, against an Amsterdam stock exchange AEX index that was up 0.7 percent.

Adjusted revenue fell slightly in Europe, which contributes the bulk of revenue, with pricing pressures especially evident in Italy and other markets. Trading conditions were also tough in Russia and Ukraine.

The company warned last month that sluggish growth in Europe would hit profit margins in the third quarter, after it became clear that European economies would not deliver the 2 to 3 percent GDP growth upon which its forecasts were based.

TNT Express said results in Europe and the Americas would stabilise over the rest of the year, with other regions likely to improve "significantly", but Chief Executive Tex Gunning said there was "limited visibility" on the European trading outlook.

The company made a 47 million euro operating loss on revenue of 1.65 billion euros, down 2 percent from a year earlier but ahead of the 1.59 billion estimated by analysts in a poll conducted for Reuters.

It made an adjusted profit of 50 million euros if costs including a provision for the French competition case, as well as restructuring, foreign exchange and depreciation costs, were excluded, the company said.

TNT Express said it would invest 185 million euros in its core European road network to improve efficiency and service quality. It plans 70 to 80 million euros in capital expenditure in the fourth quarter.

(Editing by Ryan Woo and David Holmes)

By Thomas Escritt