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UPDATE 3-Swedish lockmaker Assa Abloy flags tough conditions in residential market

(Adds CEO comments in paragraphs 1, 7 and 8)

By Elviira Luoma

April 24 (Reuters) - Sweden's Assa Abloy the world's biggest lockmaker, flagged tough conditions in the residential market on Wednesday after reporting a 5% jump in first-quarter operating profit helped by action on costs and strong pricing.

The company, whose products range from security doors to electronic and mechanical locks, said its operating profit, excluding items affecting comparability, rose to 5.43 billion Swedish crowns ($502 million) in the January to March quarter.

That was in line with consensus, JPMorgan said in a note, with sales slightly below expectations but margins firmer.

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"If you look at market conditions, we see a continuous, challenging residential market in general as well as in North America, in Europe and in Oceania, our three main markets,” CEO Nico Delvaux told Reuters.

"We should see an uptick first in the U.S. and only later in Europe. We believe that market conditions will not improve in the coming quarters in Europe,” Delvaux added.

Shares in Assa Abloy were down 2% by 1018 GMT.

The rival to Allegion and Stanley Black & Decker said organic sales fell 2% in the first quarter, affected by three fewer working days in March and the weak residential market.

Organic sales were stable in the Entrance Systems business, but declined in the Americas, Asia Pacific, EMEIA (Europe, Middle East, India and Africa) and Global Technologies segments, it said.

On a reported basis, sales grew by 9% to 35.20 billion crowns on the back of net acquired growth of 11%.

Delvaux said in a statement that "rising security threats, public safety concerns, regulatory requirements and a changing work environment" were driving demand in the sector.

Those factors are boosting call for electromechanical products, he added. The company posted quarterly organic sales growth of 6% for electromechanical products in its regional divisions.

($1 = 10.8207 Swedish crowns) (Reporting by Elviira Luoma in Gdansk; Editing by Milla Nissi and Jan Harvey)