UPDATE 2-Nice Q1 adjusted EPS falls, outlook disappoints

* Q1 non-GAAP earnings per share $0.35, as expected

* Says Q2 results won't differ much from Q1

* Nasdaq shares fall 14 percent

* Says will continue to pursue acquisitions

* Will increase headcount in second half of 2009 (Adds CFO quotes, analyst comments, share price)

By Tova Cohen

TEL AVIV, May 7 (Reuters) - Israeli digital recording systems maker Nice Systems (NICE.TA)(NICE.O) posted slightly lower adjusted first-quarter net profit, but its outlook of similar profit and revenue levels in the second quarter sent shares tumbling.

"The economic environment coupled with uncertainty regarding budget releases with some of our customers, led to longer sale cycles than originally anticipated for the first quarter," Chief Executive Haim Shani said on Thursday.

"Despite this environment we were able to achieve our profitability targets and minimise the impact on revenues."

Nice's shares closed 6.8 percent lower at 98.8 shekels in Tel Aviv while its Nasdaq-listed shares (NICE.O) opened 14 percent lower at $22.20.

Chief Financial Officer Dafna Gruber told Reuters the company had expectations that March would be stronger.

"We've seen better trends in April," she said.

While business in the Americas grew, there were declines in EMEA, especially in the United Kingdom, Gruber said.

Quarterly net income excluding special items was $21.4 million, or 35 cents per diluted share, down from $22 million, or 36 cents a share, a year earlier [See ID:nPnUKTH009].

Revenue in the quarter fell 5.1 percent to $139.2 million.

Nice was expected to earn 35 cents a share excluding items on revenue of $145.67 million, Reuters Estimates showed.