UPDATE 4-Mexico's Walmex 3rd-qtr net profit jumps 18 pct

* Net profit beats expectations

* Strong sales driven by low-price campaign (Adds Santander stock recommendation)

By Cyntia Barrera

MEXICO CITY, Oct 8 (Reuters) - Mexico's top retailer Walmex said on Thursday its third-quarter net profit jumped 18 percent, beating analysts' expectations as low-price promotions helped it weather a steep economic slump.

Mexico's first big company to report its results for the quarter, Wal-Mart de Mexico, or Walmex (WALMEXV.MX), said it earned 3.862 billion pesos ($286 million) in the July-September period, compared with 3.269 billion pesos a year earlier.

Analysts were expecting the company to earn 3.753 billion pesos in the period.

Quarterly total revenue rose 12 percent to 64.589 billion pesos, while earnings before interest, tax, depreciation and amortization (EBITDA) grew by 17 percent to 6.393 billion pesos.

Chief Executive Eduardo Solorzano told a conference call that despite the challenging economic environment, Walmex had gained market share from formal and informal competitors alike.

Despite tough economic times, Walmex has opened more stores than originally planned and kept customers from drifting to other competitors, helped by its blanket television and radio ads and aggressive low-price campaign.

"The results show a lot of operating strength and continue to demonstrate that Wal-Mart is the leader in its sector, performing well above the economy," said Ixe brokerage analyst Raquel Moscoso in a report.

Mexico's economy is expected to contract around 7 percent this year.

Santander said it was upgrading Walmex to "buy" from "hold" and raising its 2010 year-end share price target to 66 pesos from 50 pesos. The brokerage cited Walmex's strong sales, expansion prospects and the restarting of a banking business as reasons for the positive outlook.

Walmex shares ended near flat at 47.78 pesos on Thursday before the results were disclosed.

The company, a unit of U.S. retail giant Wal-Mart Stores (WMT.N), operates 1,334 stores and restaurants across Mexico. ($1 = 13.5035 pesos at end of September) (Additional reporting by Robin Emmott and Noel Randewich; Editing by Muralikumar Anantharaman)