* Q1 net profit beats estimates
* Firms FY forecast to upper end of previous range
* Boosted by higher-than-expected MOL stake gains
* Shares hit 3-week high (Adds details, shares)
PRAGUE, May 11 (Reuters) - Czech electricity producer CEZ on Thursday firmed up its net profit forecast for 2017, getting nearly the full amount that had been expected from severing ties with Hungarian group MOL.
However, CEZ, central Europe's largest listed utility, still expects an eighth straight year of deteriorating profit as it and other European power groups face weaker wholesale electricity markets.
It reported a 12 percent drop in first-quarter adjusted net profit to 8.8 billion crowns on Thursday and said it expected the full-year result at 17 billion crowns ($697 million).
In 2016, CEZ posted adjusted net profit, which strips out extraordinary effects and from which dividends are paid, of 19.6 billion crowns.
The new profit outlook was at the upper band of a forecast range it had given in March before realising gains from offloading its MOL shares. It had acquired the stake in a strategic tie-up almost a decade but plans to build gas-fired power plants were never realised.
CEZ will get 3.3 billion crowns for selling the MOL shares and redeeming bonds, along with an additional 1.2 billion crown gain for recognising the revaluation of its MOL options in 2017 revenue, it said. It had previously pencilled in a figure of 4.8 billion crowns.
Revaluation gains also boosted first-quarter profit, helping it beat the average estimate in a Reuters poll, which had seen profit falling by around a third.
Revenue also came above expectations, rising 2 percent but earnings before interest, tax, depreciation and amortisation (EBITDA) dropped 5 percent.
CEZ confirmed its guidance for full-year EBITDA to fall 10 percent to 52 billion crowns
The company's shares rose more than 2.6 percent on the results to a three-weak high and were up 1.9 percent at 437.70 crowns by 0836 GMT. (Reporting by Jason Hovet and Robert Muller; editing by David Clarke/Keith Weir)