UPDATE 2-L-3 profit tops view; sees higher 2010 earnings

* Q3 adj EPS $1.90; Street view $1.85

* Forecasts higher 2010 profit

* Ceradyne profit falls

* L-3 shares fractionally higher; Ceradyne down 8 pct (Recasts, adds Ceradyne results)

ATLANTA, Oct 27 (Reuters) - Defense contractor L-3 Communications Holdings Inc (LLL.N) posted better-than-expected quarterly profit, aided by a lower tax rate and strong demand for secure intelligence products, and forecast higher 2010 earnings.

Elsewhere in defense, body armor maker Ceradyne Inc (CRDN.O) was down 7 percent after reporting lower profit on plummeting sales and trimming its 2009 forecast.

L-3 posted net income of $250 million, or $2.12 a share, for the third quarter, compared with $210 million, or $1.70 a share, a year earlier.

Profit was aided by a tax benefit of 22 cents a share and a lower share count. Excluding the tax benefit, L-3's profit came to $1.90 a share. On that basis, analysts on average had expected $1.85 a share, according to Thomson Reuters I/B/E/S.

Revenue rose 5 percent to $3.84 billion, compared with an average forecast of $3.89 billion.

J.P. Morgan analyst Joseph Nadol said L-3's book-to-bill ratio, which compares orders on the books with orders filled, came to below 1.0 for the second straight quarter.

Third-quarter bookings "highlight an increasingly challenging sales environment," Nadol said in a note to clients.

For 2010, L-3 forecast profit of $7.85 to $8.05 a share. Analysts expect $7.92.

Based on the third-quarter results, the provider of secure communications and aircraft maintenance said it expects 2009 profit of $7.45 to $7.50 a share, up from a prior forecast of $7.25 to $7.35. Analysts expect $7.35.

L-3 shaved its sales forecast for 2009 to a range of $15.5 billion to $15.6 billion from a prior view of $15.5 billion to $15.7 billion, citing lower-than-expected sales for government services. Next year, it expects revenue of $15.7 billion to $15.9 billion, compared with $16.1 billion expected by analysts.

Ceradyne, whose products include ballistic armor, diesel engine parts and industrial bearings, posted a 74 percent drop in third-quarter earnings and cut its 2009 profit forecast to about 60 cents a share from 70 cents. Quarterly sales fell 36 percent.

L-3 shares were up 7 cents to $74.23 in morning trading, while Ceradyne was down 8 percent to $16.68. (Reporting by Karen Jacobs; editing by John Wallace)