UPDATE 1-Arconic's 2018 outlook fizzles despite strong 4th-quarter earnings

(Adds forecast for 2018, portfolio review, share buyback)

Feb 5 (Reuters) - U.S. specialty metals maker Arconic Inc on Monday forecast yearly profit and cash flow below analysts' estimates, despite comfortably topping expectations on fourth-quarter earnings and revenue.

Arconic also said new Chief Executive Chip Blankenship had begun a review of the company's business portfolio. The review would be complete by year-end, the company said, without elaborating.

Arconic expects 2018 earnings of $1.45 to $1.55 per share. Analysts on average were expecting $1.60 per share, according to Thomson Reuters I/B/E/S.

Arconic forecast 2018 free cash flow of about $500 million, compared with the analysts' expectations of $534 million.

The forecasts came alongside fourth-quarter results that beat Wall Street expectations, led by Arconic's aerospace business that makes metallic parts for aircraft and aero engines.

In October, Arconic named Blankenship, a veteran of General Electric Co as its CEO, effective Jan. 15, a move that pacified Arconic's biggest shareholder, Elliott Management.

Arconic also announced a share buyback of up to $500 million and an early debt reduction of $500 million.

The company will move out of its New York City headquarters to a more cost-effective location later this year, Arconic said.

Net loss attributable to the company was $727 million in the fourth quarter ended Dec. 31, compared with $1.26 billion a year earlier. Excluding one-time items, Arconic earned 31 cents per share.

Sales rose 10 percent to $3.27 billion.

Analysts had expected earnings of 24 cents per share and sales of $3.09 billion. (Reporting by Ankit Ajmera in Bengaluru; Editing by Sai Sachin Ravikumar)