UPDATE 1-Diamond Foods Q3 beats; raises FY11 earnings outlook

* Q3 adj EPS $0.30 vs. est $0.21

* Q3 rev at $138.7 mln vs. est $136.5 mln

* Raises FY11 earnings outlook by $0.10 a share

May 27 (Reuters) - Nuts and snacks seller Diamond Foods Inc's (DMND.O) adjusted quarterly profit beat Wall Street estimates, helped by strong growth at its snack segment and one month of Kettle Foods ownership, and raised its 2011 earnings outlook.

For fiscal 2011, the company sees earnings between $2.35 and $2.45 per share, a 10 cents per share rise from its earlier estimate. Analysts on average were expecting earnings of $2.37 a share, according to Thomson Reuters I/B/E/S.

For the third quarter ended April 30, the company saw a net loss of $4.3 million, or 22 cents a share, compared with net income of $2.7 million, or 16 cents a share, a year ago.

Excluding items, the company earned 30 cents a share.

Revenue for the company, which makes and sells cooking nuts under the Diamond label and snack nuts under the Emerald brand, rose 25 percent to $138.7 million.

Analysts on average were expecting earnings of 21 cents per share, on revenue of $136.5 million.

The snacks seller, which competes with privately held Blue Diamond Growers and industry giant Kraft Foods (KFT.N), said retail sales, which included one month of Kettle sales, rose 39 percent and snack sales rose 62 percent.

Shares of the Stockton, California-based company closed at $39.40 Thursday on Nasdaq. (Reporting by Shobhana Chadha in Bangalore; Editing by Unnikrishnan Nair)