UPDATE 1-Digital River Q4 profit in line, sees Q1 profit lagging

* Q4 adj EPS $0.29 in line

* Q4 rev $97.7 mln vs est $96.7 mln

* Sees Q1 adj EPS $0.29 vs est $0.31

* Sees adj full-year 2011 EPS $1.13 vs est $1.35

* Shares fall 8 percent in extended trade

Jan 27 (Reuters) - E-commerce services provider Digital River Inc (DRIV.O) posted quarterly profit in line with Wall Street estimates due to lower operating margin, and forecast first-quarter and full-year profit below market expectations, sending its shares down 8 percent in after-market trade.

The company, which provides technology and services that enable its clients to sell their products on the Web, expects first-quarter earnings of 29 cents a share, excluding items, on revenue of $98 million.

Analysts on average were expecting earnings of 31 cents a share on revenue of $97.3 million, according to Thomson Reuters I/B/E/S.

October-December net income fell to $5.4 million, or 14 cents a share, from $13.6 million, or 36 cents a share, a year earlier.

Excluding items, the company, which competes with Germany's Asknet (A5AGn.DE) and GSI Commerce Inc GSIC.O, earned 29 cents a share, in line with estimates.

Revenue of the company, whose customers include Adobe Systems Inc (ADBE.O), Eastman Kodak Co EK.N and Microsoft Corp (MSFT.O), fell 7 percent to $97.7 million.

The company posted a drop in the operating margin to 8 percent from 12 percent a year ago.

Analysts had expected revenue of $96.7 million.

Eden Prairie, Minnesota-based Digital River's shares, which have lost 4 percent in the last three months, were down $3 at $32.51 in after-hours trading. (Reporting by Swati Chitnis in Bangalore; Editing by Don Sebastian)