UPDATE 3-Portugal Telecom 9-mths net buoyed by Brazil growth

* Portugal Telecom net profit down but above consensus

* Revenues rise 11 pct, also beating forecasts

* Net interest expenses up 31 pct

* Shares up 5 pct

(Updates with CFO comments)

By Elisabete Tavares and Andrei Khalip

LISBON, Nov 13 (Reuters) - Portugal Telecom (PT) (PTC.LS) reported on Thursday a smaller-than-expected fall in nine-month net profit as strong revenue growth at its Brazilian joint venture, Vivo VIVO4.SA, helped offset a rising debt burden.

"The results are clearly better than expected and they are good in all areas," said Joao Carlos Fidalgo, an analyst at Caixa Banco de Investimento.

"In Brazil there were excellent results but also in the domestic market there was good development."

Net profit in the January-September period fell 35 percent to 437.7 million euros ($552.6 million), compared with an average forecast of 378 million by analysts polled by Reuters.

In the third quarter alone, net profit fell 23 percent to 184.8 million euros.

Nine-month earnings before interest, taxes, depreciation and amortisation (EBITDA) also beat forecasts to edge up 6.6 percent to 1.84 billion euros, the Iberian country's leading telecommunications company said in a statement.

Revenues, for which analysts had predicted 4.98 billion euros, rose 11 percent to 5.03 billion euros.

PT's Chief Financial Officer, Luis Pacheco de Melo, would not provide full-year earnings forecast.

However, he said PT is standing by its previously announced position that it is comfortable with analysts' consensus view of EBITDA in 2008 of 2.31 billion euros and 4.5 percent growth in revenues to 6.428 billion euros.

Operating revenues at Brazil's biggest mobile operator, Vivo -- a venture between PT and Spain's Telefonica (TEF.MC), jumped 28 percent in the first nine months in euro terms, as the number of clients more than doubled.

Pacheco de Melo said in the coming year the company will continue to bet heavily on its overseas operations, in both Brazil and Africa.

"In our international operations, we will continue our strong bet on developing PT's presence in Brazil and Africa," he said.

"We will prioritise cash-flow generation, taking advantage of the synergies that come from our size and focus on operational execution."

He said even though Brazil's currency, the real BRBY, has declined during the financial crisis, its depreciation is likely to be offset by strong growth in operations.

PT's group operating costs increased 13.9 percent to 3.2 billion euros, while financial costs soared more than 31 percent to 191.6 million euros, mainly due to a 35 percent increase in net debt since the start of 2008.

"The quality of the operational results is what is pleasing the market," one trader said. "It is likely that PT will receive comparatively more support than other telecoms today." PT shares pushed higher, outperforming the telecoms sector. At 1320 GMT, they were up 4.97 percent at 5.9980 euros, while the DJ telecommunications index .SXKP was up 2.30 percent and the Lisbon PSI20 .PSI20 index was up 0.5 percent.

PT's shares have fallen about 36 percent this year and the stock currently trades at 7.4-times estimated 2009 earnings compared with 8.46-times for Iberian peer Telefonica.

PT's net debt rose to 5.92 billion euros at the end of September following the acquisition of Telemig and its consolidation into Vivo, purchases of 3G licenses in the Latin American country and a share buyback and dividends.

Pacheco de Melo said PT is in a position to continue investing to grow despite the credit crunch, adding it recently refinanced 465 million euros of debt at "attractive terms."

Asked about dividend policy during the economic slowdown, he said: "Shareholder remuneration has always been a priority." (Editing by Axel Bugge, John Stonestreet and Andrew Macdonald)