CORRECTED - UPDATE 2-Gazprom Q1 profit beats f'cast despite low prices

(Corrects EBITDA in paragraph 13 to 407.316 billion roubles, not 407,316 billion roubles)

* Export revs to Europe and other countries down 22 pct

* Export contracts under question

* Net debt cut by almost 30 percent

* Free cash flow at record-high of 233 bln rbls

* Gazprom shares up 0.7 pct at 163 rbls, outperform index

(Adds details, analyst comments)

By Vladimir Soldatkin

MOSCOW, Sept 2 (Reuters) - Russia's Gazprom is coping with a drop in its key European contract prices, the energy giant's first-quarter results showed on Thursday, but with more pricing pressure to come, analysts were unsure buoyant sales would last.

Consumers in Europe, where economic weakness has slashed gas consumption, are vying for a lower gas price in long-term contracts with Gazprom, citing cheaper fuel on spot markets, and the company can not get the lucrative deals it had about five years ago.

Last winter, Gazprom, which supplies a quarter of the European Union's gas needs, offered some European clients a spot pricing element in their contracts to stimulate volumes, but the company said it recently stopped offering them.

Gazprom's total revenues increased by 14 percent to 956.8 billion roubles ($31.18 billion), compared with a Reuters estimate of 946.6 billion roubles, as domestic sales jumped 47 percent.

But in Europe and other countries, where it makes most of its revenues, sales declined by 22 percent to 286.22 billion roubles, as a 36 percent decrease in prices outweighed a rise in sales volumes of 37 percent.

Renaissance Capital said that under the revised contracts, sales would be on an upward path.

"We believe the results should alleviate some of the market's existing concerns over the sustainability and profitability of Gazprom's exports into Europe," Renaissance Capital said in a note.

"In 1Q 2010, Gazprom's European sales recovered 91 percent, quarter-on-quarter, to 366 billion roubles, with volumes up 45 percent."

Gazprom has denied it faces more contract revisions. Negotiations with European consumers will likely be the focus of the company's analyst call at 1300 GMT.

"A huge block of questions will be dedicated to a possibility of changes in deals with European companies," Nomura analyst Maria Radina told Reuters.

FREE CASH FLOW RECORD

Gazprom's free cash flow for the quarter hit a record 233 billion roubles, nearly triple the amount for all of 2009. Nearly half of it, however, reflected an increase in working capital, analysts said.

Increased cash flows and rising profitability put Gazprom in a more comfortable position with its 977 billion rouble net debt.

Earnings before interests, taxes, depreciation and amortisation (EBITDA) rose to 407.316 billion roubles from 337 billion roubles a year ago and 334 billion roubles in the last quarter of 2009.

Gazprom's shares in Moscow were up 0.73 percent at 162.97 roubles by 1121 GMT, outperforming a rise of 0.50 percent on the broader Micex index .

Net profit attributable to shareholders rose to 324.95 billion roubles from 103.68 billion roubles. Analysts expected a profit of 309.47 billion roubles. [ID:nLDE67N0D9]

The company reported a forex gain of 52.54 billion roubles against a loss of 149.42 billion roubles in the year-ago period due to rouble fluctuations. (Reporting by Vladimir Soldatkin; Editing by Sharon Lindores) ($1=30.75 Rouble)