Total beats Q2 expectations helped by strong cash flow and savings

PARIS, July 27 (Reuters) - French oil and gas giant Total reported forecast-beating second quarter earnings on Thursday, lifted by strong cash flow, particularly from its high-margin upstream projects, and by cost cuts.

"Total again delivered an excellent set of quarterly results with adjusted net income of $2.5 billion, a 14 percent increase compared to a year ago," Chairman and Chief Executive Officer Patrick Pouyanne said in statement.

A Reuters poll of analysts expectations had pegged Total's second quarter adjusted net income at $2.3 billion.

Total said operating cash flow before working capital changes surged 33 percent to $5.3 billion in the quarter, while Brent crude price only increased by 9 percent during the same period.

The company maintained its 2017 cost savings target of $3.5 billion with the aim of decreasing production costs to $5.5 per barrel-of-oil equivalent (boe) in 2017 from $6 last year, and then to $5/boe in 2018.

"In this context, Total has a stronger balance sheet having reduced gearing to 20 percent," Pouyanne said, adding that the group had the flexibility to take advantage of the low-cost environment in the sector to launch profitable projects and acquire resources under attractive conditions. (Reporting by Bate Felix; Editing by Andrew Callus)