* Q1 EBIT before items at 821 mln euros vs consensus for 829 mln
* Q1 Cash & Carry EBIT before items drops 6 pct
* 2016/17 outlook confirmed (Adds details, analyst comment)
Feb 3 (Reuters) - German retailer Metro, which plans to split into two companies this year, reported slightly lower than expected profit in the critical Christmas quarter, hurt by the performance of its Cash & Carry and hypermarket businesses.
Earnings before interest and taxation (EBIT) excluding special items fell 0.8 percent to 821 million euros ($883 million) in the October-December quarter, Metro said. Analysts on average expected 829 million euros.
The Cash & Carry business that serves independent traders, hotels and restaurants saw its EBIT before one-off items fall 6 percent to 431 million euros, missing the average estimate of 445 million euros, as price cuts in Russia weighed on results.
Core profit at Real hypermarkets, battling tough competition from discounters and a shift towards smaller, more frequent shopping trips, also declined more than expected.
"We expect today's statement to put more focus on operational challenges the Group is facing (particularly at the FoodCo) as most of the debate in recent months has been around the demerger process and portfolio optimisation," Morgan Stanley analysts said in a note.
Metro shares traded 2.4 percent lower at 0818 GMT.
Metro's shareholders are due to vote on the split off of the Cash & Carry wholesale business along with Real, from consumer electronics group Media-Saturn on Monday. The split is expected to happen by the middle of the year.
Chief Executive Olaf Koch said on Friday that he was confident about the outcome of the shareholder vote on the split.
Three anchor shareholders -- Haniel, Schmidt-Ruthenbeck and Beisheim -- representing almost 50 percent of the vote - have already indicated their support.
The company hopes that the move will help the two independent companies pursue more acquisitions and trigger a revaluation of the stock.
Metro currently trades at a discount to other pure wholesale retailers like Sysco and Britain's Booker, which Tesco has offered to buy.
Metro confirmed its forecast for the 2016/17 fiscal year for a slight rise in overall sales and a slight improvement in EBIT before special items. Its financial year runs until the end of September. ($1 = 0.9296 euros)
Reporting by Sylwia Lasek; Editing by Thyagaraju Adinarayan