UPDATE 3-Watson Wyatt Q4 profit beats Street; sees strong FY10

* Q4 adj EPS $0.80 vs est $0.70 * Rev down 13 pct

* Sees Q1 adj EPS $0.68 to $0.73

* Sees Q1 rev at $385-$400 mln * Shares jump 11 pct (Recasts, adds conference call details, analyst comments, updates share movement)

By Divya Sharma

BANGALORE, Aug 13 (Reuters) - Watson Wyatt Worldwide Inc (WW.N), a human resource and consultancy services provider, posted a better-than-expected quarterly profit, helped by lower expenses, and forecast fiscal 2010 profit above market estimates, sending its shares up 11 percent.

Watson Wyatt expects about $8 million to $10 million in merger costs in the first quarter of fiscal 2010, a company executive said on a conference call with analysts.

Watson Wyatt said in June it planned to take over Towers Perrin Forster & Crosby to create the biggest human resources consultancy in the world, a deal that analysts say could trigger further acquisitions in the sector. [ID:nBNG496470]

"It's a very interesting transaction that makes sense strategically because these companies have a lot of overlap but also a significant opportunity for cross selling into each other's customer bases," SunTrust Robinson Humphrey analyst Tobey Sommer said.

"There is a lot of earnings power a couple of years down the road after the merger is consummated."

Companies like Watson Wyatt and rivals Hewitt Associates Inc (HEW.N) and Mercer, a unit of Marsh & McLennan Cos (MMC.N), have been under pressure as clients defer projects or cancel services they consider non-essential, such as talent and organizational consulting and communications.

Watson Wyatt provides human resources management services, independent financial advice on life assurance and general insurance, as well as investment advice to its clients.

LOOKING AHEAD

For the first quarter, Watson Wyatt expects adjusted earnings of 68 cents to 73 cents a share, on revenue of $385 million to $400 million.

Analysts on average expected earnings of 67 cents a share, before items, on revenue of $385.9 million, according to Reuters Estimates.

The Arlington, Virginia-based company forecast fiscal-year 2010 adjusted earnings of $3.50 to $3.60 a share on revenue of $1.63 billion to $1.70 billion.

Analysts expected earnings of $3.22 a share, excluding items, on revenue of $1.78 billion.