UPDATE 1-First Mercury Q3 oper profit tops estimates

* Q3 oper EPS $0.39 vs est $0.37

* Net premiums earned up 5 pct

* Narrows FY oper EPS view to $1.45-$1.55

Nov 2 (Reuters) - Insurance services provider First Mercury Financial Corp (FMR.N) posted a quarterly operating profit that narrowly beat market estimates, helped by an increase in net premiums earned, and tightened its full-year operating earnings outlook.

The company posted a profit of $15.6 million, or 89 cents a share, compared with $54,000, 1 cent a share, a year earlier.

Operating profit, the favourite measure of profitability for insurance analysts as it excludes investment gains and losses, stood at 39 cents a share.

Analysts on average expected the company to earn 37 cents a share, according to Thomson Reuters I/B/E/S.

Net premiums earned rose 5 percent to $51.5 million.

Net realized gains on investments were $13.8 million, compared with net realized losses of $7.1 million a year earlier.

The company narrowed its 2009 operating earnings forecast to $1.45 to $1.55 a share from its prior view of $1.30 to $1.60 a share.

Shares of the Southfield, Michigan-based company closed at $12.86 Monday on the New York Stock Exchange. (Reporting by Jochelle Mendonca in Bangalore; Editing by Anne Pallivathuckal) (jochelle.mendonca@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: jochelle.mendonca.reuters.com@reuters.net))