UPDATE 2-UniFirst Q3 results beat Street, forecasts strong Q4

* Sees Q4 EPS $0.65-$0.75

* Sees Q4 rev $235mln-$240 mln

* Plans deeper cost-cutting measures, incl more job cuts

* Q3 EPS $1.12 vs est of $0.73

* Shares up 11 pct (Recasts; adds conference call details, share movement)

BANGALORE, July 1 (Reuters) - UniFirst Corp (UNF.N) posted quarterly results that topped market expectations aided by lower costs, and forecast fourth-quarter earnings well above estimates, sending its shares up as much as 11 percent. "We will be instituting even deeper, tougher cost-cutting measures, including additional headcount and departmental adjustments... to help protect our bottom line and future earnings," Chief Executive Ronald Croatti said on a conference call with analysts.

However, the uniform and protective clothing maker said even when general economic conditions improve, customers will be hesitant to increase employee levels quickly.

"As a result, it will take us longer to recover the uniform wearers that we have lost", Croatti said.

Looking ahead, UniFirst forecast fourth-quarter earnings of 65 cents a share to 75 cents a share, on revenue of $235 million to $240 million.

Analysts on average were expecting earnings of 53 cents a share, before items, on revenue of $239.8 million, according to Reuters Estimates.

Although the volatility in the current economic condition makes it increasingly difficult to forecast results, the expected decline in revenue will push operating margins in fiscal 2010 "significantly lower", the company said. UniFirst expects fiscal 2010 revenue to be lower than the current fiscal year.

LOWER COSTS AID Q3 RESULTS

For the third-quarter ended May 30, Wilmington, Massachusetts-based UniFirst earned $21.7 million, or $1.12 a share, compared with $16.9 million, or 87 cents a share, a year earlier.

Revenue fell 1 percent to $252.1 million.

Analysts were looking at earnings of 73 cents a share, before items, on revenue of $246.2 million.

The operating margin at the company's core laundry opertions rose to 14.9 percent in the period from 12.3 percent a year earlier, as total expenses fell $8.3 million helped primarily by lower energy, payroll and merchandise costs.

The company, which reduced its total debt outstanding by $25.3 million in the third quarter, said it is well positioned for acquisitions when opportunities arise.

Total debt as a percentage of capital at the end of third quarter was 24.1 percent, down from 29.7 percent at the end of fiscal 2008.

Selling and administrative expenses fell 4 percent to $52.2 million in the period.

Shares of the company, which provides workplace uniforms, protective clothing and facility services products, were trading up 7 percent at $39.65 Wednesday afternoon on the New York Stock Exchange. They touched a high of $41.25 earlier in the day.

For related alerts double click [ID:nWNAB3665] [ID:nWNAB3737] (Reporting by Renju Jose in Bangalore; Editing by Jarshad Kakkrakandy)