UPDATE 2-RiskMetrics Q3 profit tops view, keeps FY rev f'cast

* Q3 EPS $0.11 vs est $0.09

* Reaffirms FY'09 revenue outlook

* Annualized contract value declines

* Sees pickup in renewal rates

* Shares down 6 percent (Adds CEO comments, details and share movement)

By Abhinav Sharma

BANGALORE, Nov 3 (Reuters) - Risk advisory firm RiskMetrics Group Inc RMG.N posted a third-quarter profit beat analysts' estimates as reduced costs and lower tax expenses boosted margins, and maintained its fiscal 2009 revenue outlook on continued improvement in renewal rates.

The company said the sequential improvement in contract renewal rates is likely to continue and saw a further pick-up in renewal rates for the fourth quarter and into next year.

Renewal rates were likely bottoming out and were probably in the last quarter of getting affected by the financial crisis, the company's CEO Ethan Berman told Reuters.

Contract value, another key metric for the company, fell on an annualized basis as of the end of third quarter suggesting that the operating environment for the company has not fully eased.

"Realistically, I think you will start seeing annualized contract value start increasing next year," Berman said.

The company's ability to negotiate prices for contracts was pressured due to cutbacks that clients undertook during the financial turmoil but CEOXXCEO expects this pressure to lighten in the final quarter of the year.

RiskMetrics reaffirmed its revenue forecast of $300 million to $305 million for fiscal 2009. It also maintained its EBITDA outlook of $107 million to $112 million for the year.

Analysts on average were expecting revenue of $302.45 million for full year, according to Thomson Reuters I/B/E/S.

The company expanded its presence in the environmental, social and governance (ESG) space by acquiring KLD Research & Analytics which provides ESG-related research and indexes to institutional investors.

For the latest quarter the company, which acquired corporate governance advisory firm Institutional Shareholder Services (ISS) in January 2007 for about $525 million, reported net income of $7.8 million, or 11 cents a share, compared with $6.3 million, or 9 cents a share, a year earlier.

Analysts on average had expected the company to earn 9 cents a share, according to Thomson Reuters I/B/E/S.

Provision for income taxes fell 40 percent to $2.4 million from $4 million due to increased tax credits and a one-time reversal of certain tax accruals.

For the quarter, revenue dropped to $74 million from $75.6 million in the year-ago quarter.

Shares of the company were trading down 85 cents at $14.15 Tuesday afternoon on the New York Stock Exchange. (Reporting by Abhinav Sharma in Bangalore; Editing by Vikram S Subhedar)