* Raises FY adjusted EBIT forecast to 1.6-1.7 bln euros
* All divisions except Steel Americas beat expectations
* Shares indicated up 2.6 percent (Adds details on forecasts, cash flow, CEO quote, background, divisions)
FRANKFURT, May 12 (Reuters) - German industrial group ThyssenKrupp raised its full-year profit forecast thanks to better execution and stabilising economic conditions, it said on Tuesday.
The steel-to-elevators group said it now expected full year adjusted earnings before interest and tax (EBIT) of 1.6 billion to 1.7 billion euros ($1.8-1.9 billion), up from its previous forecast of at least 1.5 billion euros.
It confirmed its full-year targets for sales, net profit and free cash flow before divestments - which improved to negative 55 million euros in the quarter through end-March from negative 651 million euros a year earlier.
Shares in ThyssenKrupp were indicated up 2.6 percent at brokerage Lang & Schwarz ahead of the 0700 GMT market open.
Adjusted EBIT in the fiscal second quarter rose 32 percent to 405 million euros, beating the average estimate of 379 million euros in a Reuters poll.
“Our measures to improve efficiency are working and we are moving forward with the transformation of the group. The further earnings improvement reflects our stronger performance focus,” Chief Executive Heinrich Hiesinger said in a statement.
ThyssenKrupp is shifting its focus from steel, where its historical roots lie, to higher-margin, less volatile capital goods and services such as automotive systems, escalators and plant engineering.
All its business areas except Steel Americas beat expectations for both sales and profits in the fiscal second quarter. Capital goods accounted for 46 percent of sales and 89 percent of adjusted EBIT.
Group orders rose 2 percent to 10.4 billion euros and sales were up 7 percent at 11.0 billion. Net profit attributable to shareholders dropped 82 percent to 50 million euros, partly due to a writedown in connection with the sale of its VDM unit.
$1 = 0.8953 euros Reporting by Georgina Prodhan; Editing by Maria Sheahan