UPDATE 1-Alliance Data profit rises in third quarter

*Q3 profit jumps after a large charge in year-ago quarter

*Shares down 5 percent before results came out

NEW YORK, Oct 22 (Reuters) - Alliance Data Systems Corp, (ADS.N), which processes credit card transactions for retailers, said quarterly profit more than doubled, helped by the fact that in the year ago period, the company recorded a large writedown.

The Dallas-based company posted third-quarter net income of $69.3 million, or 99 cents a share, compared with $29.2 million, or 36 cents a share, in the year-earlier quarter.

In the third quarter of 2007, the company recorded a $40 million pretax charge.

(Reporting by Lilla Zuill and Dan Wilchins; Editing by Bernard Orr)