UPDATE 3-Zebra Tech Q3 beats Street, sees markets stabilizing

* Q3 adj EPS of 23 cents beat estimates by 2 cents

* Q3 revenue down 18 pct

* Sees Q4 sales of $200 mln-212 mln vs est $204.9 mln

* Sees Q4 EPS of 18 cents to 25 cents

* Shares recover from early losses, up 2 pct (Recasts; Adds CEO comments, details, updates share movement)

By Shrutika Verma

BANGALORE, Nov 4 (Reuters) - Zebra Technologies Corp (ZBRA.O), which makes specialty business printers, posted a quarterly profit that beat expectations, helped by increased demand for its products, and said its markets have stabilized.

Zebra shares, which fell 5 percent after the company gave a fourth-quarter outlook range whose lower end fell short of estimates, recovered and rose more than 2 percent to $25.65 after the company's positive comments.

The economy generally is strengthening and that should help improve business trends, Chief Executive Anders Gustafsson told Reuters.

"We expect that we will continue to see broad-based recovery and all regions should have some improvement in the fourth quarter," Gustafsson said.

"Our pipeline has been strengthening as we have gotten into fourth quarter and our backlog is healthy," Gustafsson added.

"IT budgets for 2009 were cut back very dramatically in the beginning of the year. As we move forward, I do not think that companies will revisit and increase their capex budgets for fourth quarter," Gustafsson said. "But there is money left in 2009 budgets that we expect to see the benefit of."

The CEO also expects capital expenditure budgets for 2010 to be "healthier than what they were in 2009."

He, however, expects pricing pressure on the company's high-end products to continue.

For the fourth quarter, Zebra forecast earnings of 18 cents to 25 cents a share, including exit and restructuring costs of 3 cents a share, on revenue of $200 million to $212 million.

Analysts were looking for earnings of 28 cents a share, excluding items, on revenue of $204.9 million.