ESSEN, Germany (Reuters) - Germany's Hochtief AG (>> HOCHTIEF AG) has agreed the $1.4 billion (901.3 million pounds) sale of its airports division, ending a lengthy quest for a buyer and giving fresh impetus to a strategy rethink led by its CEO appointed just six months ago.

The Essen-based group, controlled by Spain's ACS (>> ACS Activ. de Construc. y Servicios SA) and which appointed Marcelino Fernandez Verdes as chief executive in November, said it was raising its earnings targets on the back of its exit from less profitable, capital-intensive businesses.

Driven by relief over the end of more than three years of unsuccessful attempts to divest the unit, Hochtief shares jumped more than 5 percent, hitting their highest level since July 2011, compared with a 1.6 rise in the European construction sector <.SXOP>.

Verdes, a 58-year old former ACS manager, is leading a drive to shed airports and real estate development businesses, aiming to cut the company's debt - which stood at 944 million euros at the end of December, the last figures available - while making it a leading global infrastructure provider.

It sold the airports unit to Canada's Public Sector Pension Investment Board. The division has holdings in airports in Budapest, Duesseldorf, Hamburg, Sydney and Tirana. It also sold Athens Airport as part of the transaction, even though it had previously taken that hub out of the bundle, citing economic troubles in Greece.

Hochtief had halted the sale early last year when it was unable to fetch a price of 1.5 billion euros ($2 billion), but later revived its efforts.

"The fact that the airport assets are going to be disposed completely after such a long time is positive news and should outweigh possible discussions on the pricing," said DZ-Bank analyst Marc Nettelbeck.

Verdes also aims to leave behind large and risky construction projects that led to billions of euros of writedowns and aims to reduce the size of projects and better manage risks, he told Hochtief's annual shareholders' meeting.

"We have to put an end to nasty surprises like profit warnings," Verdes told the 591 investors present, representing 81 percent of Hochtief's share capital. "Infrastructure is our real expertise."

STRATEGIC SHIFT

Posting first-quarter earnings above expectations, the group also raised its earnings outlook for this year, saying it expected earnings before tax to rise to as much as 680 million euros in 2013, compared with 656 million predicted previously.

The group's strategic shift, which also includes strengthening its Australian mining unit Leighton (>> Leighton Holdings Limited) and building power plants such as offshore windmills, will take at least two years, Verdes said.

Hochtief's strategy contrasts with that of peer Bilfinger SE (>> Bilfinger SE), which is focusing on servicing buildings, power stations and industrial plants, and managed to achieve a higher profitability than Hochtief at the services unit.

Bilfinger generated an EBITA margin of 4.7 percent at its building and facility services unit, compared with a pretax profit margin of 2.7 percent at Hochtief.

The Mannheim, southern Germany-based competitor expects orders for maintenance to be more stable than construction projects, which hinge on the overall state of the economy, a strategy that Hochtief also pursued until Verdes became CEO.

Bilfinger is sticking with that strategy as builders struggle in the face of weak economic growth and sluggish construction activity across Europe, with several announcing writedowns, restructuring plans and job cuts.

Government spending cuts and tightening private sector budgets in Europe have held back a recovery in construction markets in the region, in contrast to the United States, which is seeing signs of improvement.

Some shareholders therefore questioned Verdes' strategy.

"Are you part of the solution or are you part of the problem?," asked Marc Tuengler of the DSW association of shareholders.

But for now Verdes' strategy is paying off and Hochtief swung to a first-quarter net income of 43.5 million euros from a loss of 34.8 million a year before, compared with a forecast 23.6 million.

Hochtief shares were up 6.1 percent at 56.65 euros by 1036 GMT, while ACS was up 6 percent at 21.075 euros.

(Additional reporting by Ludwig Burger in Frankfurt; Editing by David Holmes)

By Peter Dinkloh