UPDATE 3-Nice's Q1 profit up, raises 2011 forecast

* Q1 non-GAAP EPS $0.47 vs $0.45 forecast

* Revenue $187 mln vs $181 mln forecast

* Sees 2011 revenue $780-$803 mln, EPS ex-items $1.96-$2.06

(Adds quotes from interview with CFO, analysts' comments)

By Tova Cohen

TEL AVIV, May 4 (Reuters) - Profits at Nice Systems (NICE.O) in the first quarter beat forecasts as demand rose for its compliance and risk management products and the company increased its outlook for 2011.

"We had a very good quarter. We improved profitability and generated $55 million in cash, a record for the company," Chief Financial Officer Dafna Gruber told Reuters on Wednesday.

The performance of its enterprise business was strong as there has been a shift from selling its traditional recording systems for call centres to selling analytical software, she said. Sales in emerging markets have also been strong.

A rise in attempted fraud has led to increased demand from businesses for Nice's compliance and risk management software.

"At a time when the global banking sector, especially in the United States, continues to improve, Nice is expected to continue to benefit from growing demand for the solutions it provides to the financial sector," said Clal Finance analyst Tsahi Avraham, who raised his share price target to $41 from $39.

Israel-based Nice (NICE.TA) also has a security and video surveillance business, which accounts for 22 percent of revenue.

"I believe we continue to be very strong and continue to gain market share in all our businesses," Gruber said.

In March Nice completed its $60 million acquisition of CyberTech International, a Dutch provider of compliance recording systems. [ID:nPnNE48417]

"There was a very smooth integration ... we are very satisfied with what see in this company," Gruber said, adding that Nice, which has $657 million in cash, seeks more acquistions.

Avraham said shareholders would like to see Nice make a signficiant purchase that would bring it close to $1 billion a year in revenue instead of holding cash.

Nice shares opened up 2.3 percent at $37.32 on Nasdaq. Its shares in Tel Aviv closed up 2.3 percent.

Quarterly earnings per share excluding special items increased to 47 cents from 38 cents a year earlier. Revenue rose to $187 million from $163 million.

Analysts had estimated Nice (NICE.TA) would earn 45 cents a share excluding items on revenue of $181 million, according to Thomson Reuters I/B/E/S Estimates. Nice in February forecast revenue of $179-$183 million and EPS ex-items of 43-47 cents.

For 2011 Nice expects revenue in the range of $780 to $803 million and EPS excluding items of $1.98 to $2.07. Nice had previously estimated revenue of $775-$800 million and EPS of $1.96-$2.06.

For the second quarter Nice forecast revenue of between $190 and $196 million and EPS ex-items of 47-51 cents. (Editing by Greg Mahlich)