UPDATE 3-Marathon Oil has quarterly profit, misses Street

* Q4 EPS 50 cents vs year-earlier loss 6 cents

* Production up 2.7 percent

* Shares flat

* Q4 adjusted $0.32 vs Street $0.45

(Recasts first paragraph; adds details, analyst comment;

updates share price)

HOUSTON, Feb 2 (Reuters) - Marathon Oil Corp (MRO.N) on Tuesday reported a smaller-than-expected fourth-quarter profit that compared with a loss a year earlier, when lower crude prices caused the integrated oil company to write down the value of some of its assets.

Marathon and other companies that process oil into fuels such as diesel have seen their refining businesses hit by weak demand and rising crude costs. In the fourth-quarter, crude oil rose more than 30 percent from a year ago.

The higher crude price helped Marathon boost results in its exploration unit in the quarter, but its refining and marketing arm had a loss of $18 million.

Net profit was $355 million, or 50 cents per share, compared with a loss of $41 million, or 6 cents per share, a year earlier.

On an adjusted basis, Marathon reported a profit of 32 cents per share, while analysts on average had expected a profit of 45 cents per share, according to Thomson Reuters I/B/E/S.

The earnings miss can largely be attributed to foreign currency losses, according to a note from research firm Simmons & Co International.

Oil and gas sales volumes averaged 413,000 barrels oil equivalent (BOE) per day for the fourth quarter, up from 402,000 BOE per day a year earlier. Both periods exclude Gabon and Ireland.

For 2010, Marathon expects 2010 production available for sale to be between 390,000 to 410,000 BOE per day, compared with 405,000 BOE per day in 2009.

Marathon shares rose 2 cents to $30.67 on the New York Stock Exchange. Earlier, the company's shares fell as much as 2 percent, but a rally in crude oil pushed energy stocks up. (Reporting by Anna Driver; editing by John Wallace and Andre Grenon)