UPDATE 3-Ingram Micro results top Street forecasts

* Q3 EPS ex-items 29 cents vs Street view 20 cents

* Q3 rev $7.38 bln vs Street view $6.65 bln

* Shares up 2.4 pct after-hours (Adds CEO comments, byline)

By Gabriel Madway

SAN FRANCISCO, Oct 29 (Reuters) - Ingram Micro Inc (IM.N), the world's largest distributor of IT products, reported stronger-than-expected profit and sales, helped by improving demand and stronger foreign currencies, and shares rose 2.4 percent after hours.

Demand for technology products has improved in the second half of the year as the economy has begun to stabilize and spending by consumers and businesses has picked up.

The company sounded optimistic notes, pointing to a "budding recovery," as it looks to the end of the year.

Chief Executive Greg Spierkel said sales were helped by a better economic climate and a determined effort to re-engage with vendors and resellers, which paid off towards the end of the quarter.

"We were much more aggressive externally with our customers, we got in front of a broader base of them, and said what can we do to get some more share of wallet," he said in an interview.

Ingram distributes and markets thousands of products from more than 1,500 suppliers, including Hewlett-Packard Co (HPQ.N), its biggest partner; Apple Inc (AAPL.O); and Cisco Systems Inc (CSCO.O). Ingram has operations in 150 countries.

Roughly 65 percent of Ingram's revenue is foreign-denominated, and a weaker dollar -- as has been the case of late -- generally helps the company.

The company said net income in the fiscal third quarter ended Oct. 3 fell to $42.3 million, or 25 cents a share, from $46.4 million, or 27 cents a share, in the year-ago period.

Excluding items, the company posted a profit of 29 cents a share, ahead of the average analyst estimate of 20 cents a share, according to Thomson Reuters I/B/E/S.

Revenue fell 11 percent to $7.38 billion, above the $6.65 billion Wall Street estimate.

The impact of foreign currencies had a roughly 3 percent negative effect on the year-over-year comparison, but had a 3 percent positive impact compared with previous quarter.

The company said it expects fourth-quarter sales to decline in single-digit percentages from last year. It expects its gross margin to improve from the third quarter.

Gross margin in the third quarter was 5.44 percent, below Wall Street's estimate of 5.7 percent. The company said pricing remains competitive but stable in most countries.

Shares of Santa Ana, California-based Ingram Micro closed up 3.1 percent at $17.48 on the New York Stock Exchange and rose to $17.90 in after-hours trading. (Reporting by Gabriel Madway; Editing by Leslie Gevirtz, Bernard Orr, Gary Hill)