* Profits come in below analysts' forecasts
* Higher costs, supply chain problems restrict income
* Gerdau sees sales rising in the months ahead
SAO PAULO, May 2 (Reuters) - Brazil's Gerdau , the world's second-largest maker of long steel, missed first-quarter profit estimates after raw material costs crept up and bad weather disrupted its supply of raw materials and restricted output.
Net first quarter income of 397 million reais ($207.5 million) came in 3 percent below the 409 million reais earned in the same period a year earlier and 16 percent below the 472 million reais earned in the fourth quarter of 2011, Gerdau said.
The quarter-on-quarter fall may be an indication earnings in the sector will continue to disappoint as rising raw materials prices, which affected earnings for mills throughout 2011, keep hampering profitability.
However, Gerdau said it had produced at a pace above expected immediate demand in the first quarter to build up stocks ahead of faster sales expected in coming months.
EBITDA, or earnings before interest, tax, depreciation and amortization, fell 2 percent from the fourth quarter of 2011 to 1.008 billion reais. The figure was below the average forecast of 1.092 billion reais in a Reuters poll.
Revenue grew 10 percent from a year earlier to 9.2 billion reais, which was 1 percent more than in the fourth quarter.
Production of raw steel rose 4 percent from a year earlier, and from the fourth quarter, to 4.94 million metric tonnes. Sales were barely changed from the fourth quarter or from the first quarter of 2011 at 4.7 million tonnes.
Gerdau said it forecast investments in fixed assets for the 2012-2016 period at 10.3 billion reais, 70 percent of which would be allocated to units within Brazil and would include "strategic investments and maintenance".