REFILE-UPDATE 1-Avery Dennison cuts '08 profit outlook

* Q3 non-GAAP EPS $0.81 vs estimate of $0.74

* Q3 Sales of $1.72 bln vs estimate of $1.67 bln

* Cuts FY08 profit outlook

* Sees higher raw material costs in '08

* Shares fall 8 pct

(Recasts; adds details (Reuters) - Avery Dennison Corp (AVY.N) reported third-quarter profit that beat analysts' estimates, but shares fell 8 percent as the office supplies maker cut its fiscal 2008 outlook, citing uncertain market conditions and a slowing economy.

The company now expects full-year earnings of $2.65 to $2.85 a share, down from its prior outlook of $3.35 to $3.55 a share.

Excluding certain charges, it sees earnings of $3.15 to $3.35 a share for the period, compared with its previous estimate of $3.75 to $3.95 a share.

Analysts were expecting a profit of $3.47 a share, before special items, for 2008, according to Reuters Estimates.

Avery Dennison also increased its estimate for raw material inflation in 2008 to about $125 million from about $110 million and said it plans to pass on the higher costs through price increases.

The company also expects inventory reductions by customers to hurt sales in the fourth quarter.

For the latest third quarter, the company posted net income of $62.7 million, or 63 cents a share, compared with $58.8 million, or 59 cents a share, in the year-ago period.

Excluding items, it earned 81 cents a share.

Sales for the quarter rose 3 percent to $1.72 billion.

Analysts on average were expecting earnings of 74 cents a share, on revenue of $1.67 billion.

Quarterly results were helped by an 8 percent growth in the Pasadena, California-based company's Pressure-sensitive Materials segment.