UPDATE 2-Lorillard 3rd-qtr profit below estimates

* EPS $1.44; Wall Street view $1.52

* Newport market share rises to 10.29 pct (Adds details, background)

CHICAGO Oct 26 (Reuters) - Newport cigarette maker Lorillard Inc (LO.N) posted a lower-than-expected quarterly profit as wholesalers cut back on cigarette inventories and the company offered more special promotions to spur sales.

Lorillard said on Monday third-quarter profit was $235 million, or $1.44 a share, compared with $237 million, or $1.38 a share, a year earlier. Per-share profit rose because of a decline in shares outstanding.

Analysts on average forecast $1.52 a share, according to Thomson Reuters I/B/E/S.

Lorillard shipped 9.46 billion cigarettes in the quarter, down 6.3 percent from a year earlier, but only half the estimated decline for the entire U.S. cigarette industry.

Newport U.S. market share rose to 10.29 percent from 10.01 percent a year earlier.

Revenue rose 26 percent to $1.42 billion, largely due to a large increase in the federal cigarette tax.

Excluding excise taxes, revenue was $953 million.

Last week, Lorillard competitor Altria Group Inc (MO.N) posted lower-than-expected quarterly revenue as cigarette volume dropped 16.4 percent. [ID:nN17379270]

Another rival, Reynolds American, also saw volume fall more than expected. [ID:nN22531076]

In August, Lorillard said its board of directors approved an increase in the company's quarterly dividend to $1.00 a share from 92 cents a share. (Reporting by Brad Dorfman; editing by John Wallace and Maureen Bavdek)