UPDATE 1-Exco Technologies posts Q3 profit on better margins

* Q3 EPS C$0.09 vs loss C$0.02, last year

* Q3 rev up 51 pct to C$42.7 mln

July 28 (Reuters) - Canada's auto parts maker Exco Technologies Ltd (XTC.TO) swung to a quarterly profit helped by better gross margins.

"We expect the growth to continue at a gradual yet steady pace through the next several quarters," the company said in a statement.

The company posted net income of C$3.5 million, or 9 Canadian cents a share, compared with a net loss of C$998,000, or 2 Canadian cents a share, a year ago.

Sales for the quarter rose 51 percent to C$42.7 million.

Analysts on average were expecting earnings of 6 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Gross margins for the quarter were 27.6 percent, compared with 20 percent a year ago.

Shares of the company closed at C$3.55 Wednesday on the Toronto Stock Exchange. (Reporting by Arnika Thakur in Bangalore; Editing by Roshni Menon)