UPDATE 2-Danish jeweller Pandora regains its sparkle
* Q3 EBIT 463 mln Danish crowns, vs 316 mln forecast
* Revenue rises to 1.79 bln crowns, vs 1.56 bln forecast
* Raises full-year revenue, margin forecasts
* Shares up over 18 percent, hitting 15 months high (Adds details, analysts, CEO quotes, updates share price)
COPENHAGEN, Nov 6 (Reuters) - Jewellery maker Pandora lifted its full-year revenue and margin forecasts on Tuesday, signalling a costly drive to revamp its product range and lower prices is bearing fruit.
Shares in the Danish firm, which is known for its charm bracelets, leapt to a 15-month high after it posted a smaller-than-expected fall in third-quarter earnings, driven by currency moves and strong sales in the United States and Europe.
Pandora launched an expensive campaign in February allowing retailers to swap unsold stock for new and often lower priced ranges, in a bid to kick start sales after conceding it had raised prices too high for its core customers.
"All in all, it looks like Pandora has managed to lower their sales prices, upgrade retailers' stock and develop strong new collections," said Jyske Bank analyst Jens Thomsen.
Pandora shares were up 18.5 percent at 109 Danish crowns by 0955 GMT, their highest in 15 months and against a 0.4 percent rise in Copenhagen's benchmark stock index.
The group said it now expected 2012 revenues to top 6.3 billion crowns ($1.1 billion), up from an earlier forecast for over 6 billion. It also forecast a full-year EBITDA (earnings before interest, tax, depreciation and amortisation) margin in the "mid 20s" percent, compared with the "low 20s" previously.
Third-quarter earnings before interest and tax (EBIT) fell 8.5 percent to 463 million Danish crowns ($79 million), beating all forecasts in a Reuters poll in which the average estimate was 316 million.
So far this year, the group had received returns of discontinued products worth 609 million crowns, and replaced products worth 599 million, it said.
It has estimated the stock return campaign would cost around 700-800 million crowns in 2012.
Third-quarter revenue rose 14 percent to 1.79 billion crowns, compared with a forecast for 1.56 billion. U.S. sales climbed 22 percent while European sales saw a 13 percent rise, cushioning a decline in the Asia Pacific region.
"We continue to perform in line with our '18 months turn-around plan'," chief executive Bjorn Gulden said. "The third quarter developed even a little better than we expected."
($1 = 5.8353 Danish crowns) (Editing by Dan Lalor and Mark Potter)