UPDATE 3-Lincoln National posts quarterly profit

* Q3 net EPS of $0.44

* Oper EPS of $0.84 beats consensus view of $0.76

* Shares rise 7.9 pct after the report

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(Adds analyst comment, financial detail, byline, updates
shares)

By Lilla Zuill

NEW YORK, Oct 28 (Reuters) - Lincoln National Corp (LNC.N),
a large U.S. life insurer, recorded a quarterly profit on
Wednesday after posting losses in the past three quarters,
helped by a gain from the divestiture of a unit.

Third-quarter net income rose to $153 million, or 44 cents
a share, compared with $148.4 million, or 58 cents a share, in
the year-ago quarter when there were fewer shares outstanding.

The company's sale of a UK unit helped offset realized
investment losses and a hedging losses related to its sale of
variable annuities, a popular retirement product.

Philadelphia-based Lincoln had been hurt in recent
quarters by investment losses and a surge in costs for stock
market-linked annuities.

But its fortunes and those of the life insurance sector as
a whole, have shown early signs of stabilization, as investment
values and stock markets have risen.

Lincoln, along with rival Hartford Financial Services Group
Inc (HIG.N), got a helping hand. Both received cash injections
from the U.S. Treasury earlier this year. Lincoln received $950
million to help shore up capita and raised additional funds
through a share offering.

"These results should make people feel better about LNC,"
Hexagon analyst David Havens said in an email after the
results.

"With a little (actually a lot) of help from Uncle Sam, and
a receptive capital market, along with buyers of non-core
assets, the company has been able to reposition itself pretty
rapidly."

On an operating basis, Lincoln's quarterly profit was
$275.5 million, or 84 cents a share, in the quarter compared
with $297.8 million, or $1.16 a share a year ago.

Analysts on average expected the insurer to earn about 76
cents a share, according to Thomson Reuters I/B/E/S.

In the latest quarter, Lincoln recorded realized investment
losses of $42 million and also also had a loss of $151 million
from its variable annuity hedging program, which it said was in
line with expectations.

But these losses were at least partially offset by a $55
million after-tax gain on the sale of Lincoln National (UK) Plc
and the ability to free up $15 million it previously set aside
to meet commitments on variable annuities it sold, thanks to
recovery in equity markets.

The company said it is on track to complete the sale of
another unit, Delaware Investments, by year end, potentially
giving it a boost in the fourth quarter.

Lincoln's shares fell about 5.5 percent to $22.25 in the
regular session and rose about 7.9 percent in trading after the
bell to $24. The stock has traded as low as $4.76 and as high
as $28.09 in the past year, according to Reuters data.
(Reporting by Elinor Comlay and Lilla Zuill; editing by
Matthew Lewis and Andre Grenon)