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CORRECTED-UPDATE 1-Defence group Thales' H1 operating profits rise 16 pct

(Corrects source to finance director, paragraph 6)

* Transport unit climbs out of red

* New orders also up

PARIS, July 26 (Reuters) - French defense and aerospace group Thales on Wednesday posted better than expected first-half figures as new orders rose and the company's transport unit climbed out of the red.

Operating profit grew 16 percent, or 17 percent on an underlying basis, to 637 million euros on revenues which rose 5.8 percent - 5.9 percent in organic terms - to 7.241 billion. Operating margins added 0.7 percentage points to 8.8 percent.

Analysts were on average looking for operating profit of 588 million euros on sales of 7.138 billion for an 8.2 percent margin, according to Thomson Reuters I/B/E/S consensus data.

The order intake for Europe's largest defense electronics maker rose 10 percent to 5.972 billion euros, dominated by defense and security contracts in mature markets as emerging markets marked a pause despite an express train deal in Dakar.

Thales bagged seven contracts worth over 100 million euros in the first half compared with three a year earlier.

"The group remains on the front foot. We are looking at a gradual improvement in Thales's profitability," Finance Director Pascal Bouchiat told reporters.

Thales expects 1.48-1.5 billion euros in core operating profit in 2017, up 9-11 percent from last year. It also targets mid-single-digit underlying sales growth this year.

Those forecasts and mid-term objectives, that include an operating margin of 9.5-10 percent in 2017/18, remain unchanged.

The company's net cash pile dipped only slightly in the first half - to 2.294 billion euros from 2.366 billion at end-2016 - after a sharp rise in first-half free cashflow, as Thales carried out a "temporary slowdown" in investments. (Reporting by Tim Hepher, Cyril Altmeyer; Editing by Sudip Kar-Gupta)