UPDATE 2-Allstate posts quarterly profit, misses Street

* Q3 EPS 41 cents vs loss $1.70 year ago

* Q3 oper EPS 99 cents, 2 cents shy of analysts' forecast

* Improvement on lower catastrophe, investment losses (Adds financial details, CEO comments, byline, updates shares)

By Lilla Zuill

NEW YORK, Nov 4 (Reuters) - Allstate Corp (ALL.N), the largest publicly traded U.S. home and auto insurer, swung to a profit on Wednesday from a large year ago loss, helped by stronger revenue, and fewer catastrophe claims.

A year ago, hurricanes Gustav and Ike were largely responsible for $1.82 billion in catastrophe losses, leaving a gaping hole in Allstate's results. Investment losses from the rapid erosion in credit markets added to its wounds.

Third quarter net income was $221 million compared with a net loss of $923 million in the year-ago quarter.

"It feels a lot different than a year ago," Chief Executive Tom Wilson said in an interview. "We are back on course and I feel really good about where the company is heading."

Allstate's total revenue rose 3.6 percent in the quarter to $7.6 billion, something Wilson attributed partly to improvement in customer retention.

But there was one sore point for Wilson.

"I am still not happy with our homeowners business. It is not earning an adequate return," he said.

That division has taken steps to boost profits and expects to benefit from rate increases in several states, he added.

Allstate's operating earnings, which exclude investment gains and losses, were also vastly improved in the quarter, but fell two cents short of analysts' average forecasts.

The operating profit of 99 cents a share, compared with a loss of 35 cents a share last year, missed analysts' forecast of $1.01 a share, according to Thomson Reuters I/B/E/S.

In the latest quarter, catastrophe losses fell to $407 million and total realized capital losses narrowed to $519 million from $1.3 billion in the year-ago period.

Capital losses can rise or fall with swings in the value of securities.

Book value, a key valuation measure for investors, rose 16 percent from the end of June to $32.29 a share.

The shares of the Northbrook, Illinois-based insurer fell 0.4 percent, or 12 cents, in the regular session on Wednesday to $29.62 a share and were not active in trading after the results. (Reporting by Lilla Zuill; editing by Andre Grenon)