UPDATE 2-Trex Q2 profit triples, sees Q3 sales above Street view

(Recasts; adds analyst's comments; updates share movement)

July 30 (Reuters) - Deckings and railings maker Trex Co Inc TWP.N reported a three-fold rise in quarterly profit, helped in part by a tax gain, and it forecast third-quarter sales above market estimates, sending shares up about 27 percent.

"While sales in the quarter were better than our estimates, their margin was also significantly better," BB&T Capital Markets analyst John Kasprzak said by phone. "So, there was upside in both areas."

For the second quarter, net income was $7.9 million, or 52 cents a share, compared with $2.6 million, or 17 cents a share, a year earlier.

Analysts on average were expecting earnings of 18 cents a share, excluding items, according to Reuters Estimates.

Net sales fell 20 percent to $95 million, but were still above the consensus estimate of $87.8 million.

The company said its effective tax rate for the quarter was negligible, as it recognized a decrease in the valuation allowance against the deferred tax asset, which boosted earnings by 16 cents a share.

Kasprzak said the company's capacity utilisation, which was just under 50 percent, played an integral role in boosting quarterly performance.

Trex also forecast third-quarter sales of between $90 million and $97 million, while consensus estimate is $68.5 million.