UPDATE 3-Forest Labs outlook trails Street, shares sink

* Q3 EPS 85 cents ex-items vs 86-cent estimate

* Revenue rises to $1.06 bln from $992.5 mln

* Sees FY EPS at $3.40-$3.50; Street at $3.52

* Shares fall 4.8 percent (Recasts; adds shares, analyst comment)

NEW YORK, Oct 20 (Reuters) - Drugmaker Forest Laboratories Inc (FRX.N) posted a lower-than-expected quarterly profit on Tuesday and gave an outlook below analysts' forecasts, sending shares down 4.8 percent.

Net income fell to $186.7 million, or 61 cents per share, in its second quarter, ended Sept. 30, from $244.1 million, or 80 cents per share, a year earlier.

Excluding special items, Forest earned 85 cents per share, which was 1 cent below what analysts estimated on average, according to Thomson Reuters I/B/E/S.

The special items including a $100 million license fee from a previously announced deal with Nycomed A/S [NYCMD.UL] in which Forest gained rights to an experimental respiratory drug.

Revenue rose about 7 percent to $1.06 billion.

Sales of Lexapro, an anti-anxiety medication, fell 3.1 percent to $566.0 million, just shy of analysts' forecast of $567.7 million. Sales of Namenda, an Alzheimer's treatment, jumped 11.9 percent to $275.3 million, beating estimates of $263.74 million.

The company said it also beat its own expectations for sales of new drugs Bystolic, a hypertension treatment, and Savella, a fibromyalgia medication.

However, Forest issued a revised outlook for the year ending March 31, saying it now sees earnings of $3.40 to $3.50. That was slightly below analysts' forecasts of $3.52.

The outlook reflects higher spending ahead of the expected launch of Daxas, the drug for chronic obstructive pulmonary disease that Forest licensed from Nycomed.

"We don't see this as a major negative for the stock since near-term earnings are not the story, and since we think the Street should quickly realize the tremendous potential that Daxas has," Jefferies analyst Corey Davis said in a research note.

The company said it still expected revenue of $4.1 billion, in line with Wall Street forecasts.

Forest is trying to build up its product line ahead of the U.S. patent expiration of Lexapro in early 2012.

Shares were down $1.45 to $28.80 in afternoon trading on the New York Stock Exchange. (Reporting by Christopher Kaufman and Lewis Krauskopf; editing by Gerald E. McCormick, Lisa Von Ahn and Steve Orlofsky)