REFILE-UPDATE 2-Brocade outlook weaker than expectations

(Refiles to reflect more recent after-hour trades in second paragraph)

* Fiscal Q4 revenue, EPS forecasts weaker than expected

* Company says cautious on IT spending in some regions

* Q3 revenue up 2 pct at $504 mln

* Q3 EPS ex items 13 cents, in line with Wall St view

* Shares fall 4.7 percent after hours (Recasts with outlook)

NEW YORK, Aug 18 (Reuters) - Brocade Communications Systems Inc's (BRCD.O) fourth-quarter outlook fell short of the market's expectations, adding to concerns among investors already spooked by bigger rival Cisco Systems Inc's (CSCO.O) cautious outlook.

The network equipment maker, whose shares were down 4.7 percent after hours also said it continues to see challenges in the overall economy, and that it was cautious about the IT spending environment in Europe as well as Japan.

Brocade said it expects revenue in the current (fourth) quarter to be around $530 million to $550 million, while Wall Street analysts on average expected $550 million.

It also forecast fiscal fourth-quarter earnings, excluding items, to be around 12 cents to 14 cents per share, lower than the market's expectation of 15 cents a share.

Cisco last week stoked fears of a renewed downturn in technology spending, with its Chief Executive John Chambers noting "unusual uncertainty" among its business customers.

Both Cisco and Brocade sell communications equipment like routers and switches that help companies handle data networks. The two companies were hit by a decline in technology spending during the economic downturn, but have been recovering this year.

For the third quarter, Brocade said revenue rose 2 percent to $504 million from $493 million a year earlier. That was largely in line with the average analyst forecast of $508 million.

It swung to a net profit of $22 million, or five cents a share, from a loss of $23 million, or six cents a share, a year earlier. Excluding items, its profit was 13 cents per share, a penny higher than a year earlier and in line with the market's forecast.

Brocade shares fell after-hours to $4.90 after closing up 3.4 percent at $5.14.

The shares have fallen around 36 percent so far this year as speculation of an acquisition receded, with potential buyers such as Hewlett-Packard Co and Dell Inc choosing to buy other companies instead.

Worries of a slowdown in Europe, as well as concerns that it was having problems integrating Foundry Networks, which it bought in 2008, also have worried investors. (Reporting by Ritsuko Ando; Editing by Richard Chang and Carol Bishopric)