UPDATE 2-RiskMetrics Q3 beats Street as risk-advice unit grows

* Q3 EPS, revenue beats estimates

* Focus on risk-advisory business in near-term

* Sees 2008 revenue at high end of prior view

* Lowers 2008 renewal rate view slightly

* Shares up 6 percent (Adds CEO comments, updates share movement)

By Ratul Ray Chaudhuri

BANGALORE, Oct 30 (Reuters) - RiskMetrics Group Inc (RMG.N), which advises companies on how to navigate risk, posted a quarterly profit that soared fourteen-fold from a year earlier, helped by revenue growth at its risk- and proxy-advisory segments.

The advisory services provided by the company, which went public in January, are in demand as companies navigate tighter credit and volatile investment markets.

RiskMetrics also offers corporate-governance advice to large investors through Institutional Shareholder Services (ISS), which it acquired early last year.

In the short-term, the company will focus more on the risk-advisory segment, Chief Executive Ethan Berman said.

"I do think that there are some significant governance issues that are going to come out of this, in particular around financial institutions. But I guess in the short-run the world is very risk-focussed," Berman said by phone.

For the latest third quarter, risk-advisory revenue rose 32 percent, while revenue from the ISS business rose 11 percent.

The company trimmed its 2008 expectations for renewals from clients for its services to between 88 percent and 89 percent amid consolidation in the financial segment. It had previously expected a renewal rate of 89 percent to 91 percent.

"The largest reason for non-renewals has always been consolidation. We obviously have seen a more rapid consolidation in the last three to six months than we have experienced in the financial segment in a long long time," Berman said.

The company reported net income of $6.3 million for the third quarter, compared with $453,000 a year earlier. Revenue rose 22 percent to $75.6 million. [ID:nWNAB4761]

The company expects 2008 revenue at the higher end of its previous forecast of $285 million to $295 million.

Shares of the company touched a high of $14.55, before paring some gains to trade up 5 percent at $14.40 midday Thursday on the New York Stock Exchange. (Editing by Himani Sarkar, Pratish Narayanan)