UPDATE 2-Arconic has strong fourth quarter but 2018 forecast fizzles

* Sees 2018 adj earnings of $1.45 to $1.55/shr vs est $1.60/shr

* Free cash flow forecast also falls short

* Company says reviewing strategy and portfolio

* Stock falls 5 pct (Adds stock price, one-time expenses, CEO quote)

Feb 5 (Reuters) - Arconic Inc's fourth-quarter earnings and revenue easily topped analysts' estimates but the specialty metals maker's forecast for yearly profit and cash flow lagged expectations, sending its shares sliding.

Shares of New York-based Arconic, whose key customers include aircraft makers Boeing and Airbus, fell 7.3 percent to $26.98 on Monday morning.

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 and a tax rate of 27 to 29 percent.

Analysts on average were expecting earnings of $1.60 per share and a tax rate of 28.4 percent, according to Thomson Reuters I/B/E/S.

Arconic forecast free cash flow of about $500 million, falling below analysts' expectations of $534 million.

The outlook came alongside fourth-quarter results that beat Wall Street expectations, helped by higher demand across Arconic's businesses, including its biggest unit that makes metallic parts for aircraft and aero engines.

Blankenship, a General Electric Co veteran, took the helm in mid-January in a move that pacified Arconic's biggest shareholder, Elliott Management.

Former CEO Klaus Kleinfeld resigned last April after the company found he sent a letter in "poor judgment" to Elliott, with whom Arconic was embroiled in a proxy war.

"Arconic made progress on growing revenue and profits and taking out cost. However, a significant opportunity for improvement remains," Blankenship said in a statement.

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, topping analysts' estimates of 24 cents.

Arconic recorded $879 million in one-time expenses in the quarter, including the impact of new U.S. tax laws.

Sales rose 10 percent to $3.27 billion, ahead of the $3.09 billion expected by analysts.

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

The company's shares have risen 15.5 percent over the past 12 months, compared with a 21 percent increase in the S&P 500 benchmark. (Reporting by Ankit Ajmera in Bengaluru; Editing by Sai Sachin Ravikumar)