UPDATE 2-Intuit posts loss; outlook below Street view

* Q1 loss of 10 cts/shr vs Street view for 16 cent loss

* Sees Q2 profit of 29-32 cents vs Street view for 37 cents

* Shares decline 2.2 percent after-hours (Adds CEO comments, updates shares)

BOSTON, Nov 19 - Intuit Inc <INTU.O>, maker of QuickBooks accounting software, posted a narrower-than-expected quarterly loss on tight cost controls, though it issued a profit outlook below Wall Street projections.

The software maker's shares fell more than 2 percent in after-hours trading as it painted a pessimistic picture of the economy. Its results are sometimes seen as a bellwether for the economy because its top-selling product is QuickBooks accounting software for small businesses.

Chief Executive Brad Smith said that he has seen no material improvement in sentiment among small business customers who use Intuit's QuickBooks software or consumers who buy its Quicken and TurboTax programs.

He said that were only a few small signs that things were improving, but that they were fairly measured.

As an example he noted that the volume of credit card transactions that Intuit processes for businesses dropped 8 percent from a year earlier in the first quarter. That was a slight improvement from the 9 percent declines posted in each of the three preceding quarters.

"In terms of the new reality, we're going to be crawling out of this ditch for a long time as an economy," Smith said.

Intuit's lower-than-expected forecast overshadowed better-than-expected results for first quarter ended Oct. 31, which Intuit attributed to cost controls, higher-than-expected revenue and its postponing some spending on marketing until the second quarter.

It posted a first-quarter loss of 10 cents a share, narrower than the 16 cent a share loss forecast by analysts polled by Thomson Reuters I/B/E/S.

First-quarter revenue rose 2 percent to $493 million, ahead of analysts' average forecast of $488 million.

The Mountain View, California-based company normally reports losses in its fiscal first and fourth quarters because they do not fall in the tax season, when consumers would buy Intuit's tax preparation software. Profits in the second and third quarters more than compensate for those losses.

The company forecast second-quarter per-share profit, excluding items, of 29 cents to 32 cents, sharply below the Street view of 37 cents.

It also projected second-quarter revenue of $800 million to $835 million. The $817.5 million mid-point of that range is below the average analyst forecast of $833 million.

Shares of Mountain View, California-based Intuit fell 2.2 percent to $29.60 from their Nasdaq close of $30.27.