UPDATE 2-Genesee & Wyoming Q3 profit beats Street

* Q3 adj EPS $0.43 vs est $0.40

* Sees Q4 carloads down 4 percent sequentially

* Shares up as much as 10 percent (Recasts; adds conference call details, share movement)

BANGALORE, Nov 3 (Reuters) - Genesee & Wyoming Inc (GWR.N), which owns and operates short-line and regional railroads, posted a better-than-expected quarterly profit and said it was seeing signs of the economy stabilizing.

However, the company expects a seasonally weak fourth quarter and forecast quarterly revenue below Wall Street expectations.

The company's shares rose as much as 10 percent Tuesday morning on the New York Stock Exchange, in tandem with other railroad stocks that were driven by Berkshire Hathaway's offer to acquire No.2 U.S. railroad Burlington Northern Santa Fe BNI.N. [ID:nN03483590]

The company, whose third-quarter revenue rose 5 percent sequentially, expects fourth-quarter earnings of 36 cents to 40 cents a share on revenue of $130 to $135 million.

Analysts were expecting earnings of 38 cents a share on revenue of $142.2 million, according to Thomson Reuters I/B/E/S.

It expect freight volumes in the fourth quarter to be around 190,000 carloads, down 4 percent sequentially.

"Other than a normal seasonal decline from the third quarter, we expect our carloads to remain relatively stable," CFO T.J. Gallagher said on a conference call with analysts.

Genesee & Wyoming operates railroads in the United States, Canada, Australia and the Netherlands, and transports commodities such as coal, paper, metals and minerals.

According to the most recent data from the Association of American Railroads, carloadings on major U.S. railroads were down 14.8 percent in the week ended Oct. 24.

On the call, company executives said Warren Buffett's offer to buy Burlington Northern was a positive for the railroad industry.

"Having someone of Warren Buffett's stature as a voice on issues related to national rail policy can only help the U.S. rail industry, particularly a thoughtful voice close to the current administration," said Chief Executive John Hellmann.

For the third quarter, Genesee & Wyoming's net income was $21.7 million, or 53 cents a share, up modestly from $21.2 million, or 58 cents a share, a year ago.

Excluding certain gains, adjusted earnings of 43 cents beat estimates of 40 cents a share. [ID:nWNAB8843]

Expenses were down 16 percent to $105.3 million.

Shares of the company were up 83 cents at $30.20 in afternoon trade. (Reporting by A.Ananthalakshmi in Bangalore; Editing by Vinu Pilakkott; Unnikrishnan Nair)