UPDATE 1-Arctic Cat Q2 results beat Street view

* Q2 EPS $0.81 vs est $0.62

* Q2 revenue $166.3 mln vs est $155.8 mln

* Shares rise 18 pct

Oct 29 (Reuters) - All-terrain vehicle maker Arctic Cat Inc (ACAT.O) posted a better-than-expected quarterly profit, helped by increased gross margins and cost cuts, sending its shares up 18 percent.

The company said net income for the second quarter ended Sept. 30 was $14.8 million, or 81 cents a share, compared with $16.9 million, or 93 cents a share, a year ago.

Revenue fell 19 percent to $166.3 million, primarily due to lower sales of snowmobiles and ATVs.

Analysts on average were expecting earnings per share of 62 cents, on revenue of $155.8 million, according to Thomson Reuters I/B/E/S.

The company said gross margins increased 410 basis points in the second quarter, while operating expenses fell 12 percent to $23.3 million.

Arctic Cat did not give an earnings-per-share forecast for fiscal 2010, but said it expects improved results compared with fiscal 2009.

The company maintained its 2010 revenue forecast of $425 million to $460 million, while analysts were expecting revenue of $445.9 million.

Shares of Arctic Cat touched a high of $6.79 before paring some gains to trade up 14 percent at $6.57 Thursday midday on Nasdaq. (Reporting by Shobhana Chadha in Bangalore; Editing by Anne Pallivathuckal)