UPDATE 2-GE profit falls 59 percent; cash flow up in quarter

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July 21 (Reuters) - General Electric Co's profit fell nearly 60 percent in the second quarter, largely due to the sale of its appliances business, but cash flow rose, sales topped expectations and its shares were slightly lower.

The maker of power plants, jet engines, medical scanners and other industrial equipment affirmed its full-year forecast for cash flow, profit, revenue and operating margin.

Shares were at $26.59 in premarket trading, down about 10 cents and giving up a rise to nearly $27 shortly after the results were released.

GE faced a "slow-growth, volatile environment" in the quarter, chief executive Jeff Immelt said in his final earnings release before his Aug. 1 retirement, when GE healthcare chief John Flannery takes over.

GE has cut $670 million in industrial overhead costs so far this year, Immelt said, and will "meet or exceed" its $1 billion target for 2017 - a goal set after discussion with activist investor Trian Fund Management.

GE was under pressure to report strong cash flow after a weak showing in the first quarter that included an unexpectedly large $1.6 billion outflow of cash due to slow customer payments and failure to deliver some power plant equipment.

Cash flow from operations totaled $3.6 billion, up from $400 million in the first quarter. The figure was down 67 percent from a year ago, partly reflecting the loss of contributions from the appliances division.

Revenue fell 12 percent to $29.56 billion as weakness in its energy connections business offset strength in renewables and power units. GE's energy connections business provides electrification and automation products to the oil and gas, mining, utility and marine industries.

The revenue figure was slightly above the $29.02 billion consensus estimate of analysts polled by Thomson Reuters I/B/E/S. GE said its appliances sale eliminated $3.1 billion of revenue.

Net profit slumped 59 percent to $1.34 billion, or 15 cents a share, in the quarter ended June 30, from $3.30 billion, or 36 cents a share, a year earlier.

Adjusted earnings fell 45 percent to 28 cents a share, compared with estimates for 25 cents. (Additional reporting by Rachit Vats in Bengaluru; Editing by Saumyadeb Chakrabarty and Nick Zieminski)