UPDATE 2-NetSpend Q3 profit beats Street

Thu Nov 3, 2011 9:39pm EDT

* Q3 adjusted EPS $0.12 vs est. $0.11

* Q3 revenue rose 9 percent to $74.3 mln

* Sees 2011 adjusted EPS $0.45-$0.47

* Sees 2011 revenue at lower end of $306-$314 mln range

By Brenton Cordeiro

Nov 3 (Reuters) - Prepaid debit card company NetSpend Holdings Inc reported a quarterly profit that beat analysts' estimates, helped by higher card revenues, and forecast 2011 revenue at the lower end of its outlook range.

For the full year, the company sees revenue at the lower end of its outlook range of $306 million to $314 million and expects adjusted earnings of 45 cents to 47 cents a share.

Analysts expect NetSpend to earn 44 cents a share, on revenue of $307.5 million, according to Thomson Reuters I/B/E/S.

"There's no major shoe that's dropped or anything fundamental. You saw this on the other guys that announced last week too," Chief Executive Dan Henry told Reuters by phone.

Last week, rival Green Dot Corp also posted a quarterly profit that beat analysts' estimates, and forecast full-year operating revenue to come in at the lower end of its previous outlook.

But NetSpend, which had lost three additional distribution partners earlier in the year, recently announced partnership agreements with the likes of BET, PayPal, Blackhawk and 7-Eleven.

"I would in a heartbeat, trade three minor check cashing partners for BET, PayPal, Blackhawk and 7-Eleven. It seems like they're more than compensated, we just haven't seen it yet," D.A. Davidson & Co's John Kraft said.

On an adjusted basis, the company that went public last year earned 12 cents a share for the third-quarter. Revenue grew 9 percent to $74.3 million.

"It was a mixed quarter. There's been concerns about their guidance, and they've barely met the numbers but there could be a lot of optimism about their new partners," Kraft said.

"They really do have a series of headwinds now that will be going away shortly and will potentially have a series of tailwinds that will be kicking in in 2012."

Shares of the company, which have plunged over the past 12 months -- losing as much as 60 percent of their value, closed at $5.67 on Thursday on Nasdaq.