UPDATE 1-Pantry Q3 profit tops market estimates

(Recasts; adds details, share movement)

July 31 (Reuters) - Convenience-store operator Pantry Inc (PTRY.O) posted a quarterly profit, well above market estimates, helped by lower expenses, sending its shares up as much as 17 percent.

For the third quarter ended June 26, net income was $10.7 million, or 48 cents a share, compared with $12.6 million, or 55 cents a share, a year earlier.

The company said latest-quarter results include a charge of 4 cents a share related to the company's gasoline hedging positions.

Total revenue rose 20 percent to $2.47 billion.

Analysts had expected earnings of 29 cents a share, before special items, on revenue of $2.47 billion, according to Reuters Estimates.

General and administrative expenses fell 18 percent, while store operating expenses fell about 5 percent.

For fiscal 2008, the company now expects store operating and general and administrative expenses to be $605 million to $610 million, down from its prior view of $615 million and $630 million.

Sanford, North Carolina-based Pantry expects 2008 merchandise sales of $1.62 billion to $1.65 billion and gasoline sales of 2.1 billion gallons.

It had previously forecast merchandise sales of $1.6 billion to $1.7 billion and gasoline sales of 2.1 billion to 2.2 billion gallons.

Shares of the company, which touched a high of $16.30 earlier in the day, were trading up $1.78 at $15.76 Thursday morning on Nasdaq. (Reporting by Sriram Iyer in Bangalore; Editing by Amitha Rajan)