Aug 1 (Reuters) - German engine manufacturer MTU Aero

Engines now expects an adjusted core profit margin of

13% for the financial year, from an earlier forecast of over

12%, the company said on Thursday.

The Airbus and Boeing ( BA ) supplier cited

progress in its geared turbofan fleet management program and a

sustained positive market.

Last year, MTU had to recall up to 3,000 geared turbofan

engines from its partner Pratt & Whitney due to a

potentially defective turbine disc, costing the company about 1

billion euros ($1.08 billion). The company is said to be in

talks with Pratt about a potential compensation.

MTU also reported second-quarter adjusted core profit at

252 million euros ($508.8 million), up 16% compared to 193

million euros last year and above the 223 million euros expected

by analysts in a company-provided consensus.

($1 = 0.9237 euros)