UPDATE 2-Diebold Q3 results trail Street, narrows FY outlook

* Q3 adj EPS of $0.39 misses est of $0.41

* Q3 rev $645.2 mln vs est $737.5 mln

* Tightens full-year outlook

* Shares down 6 percent (Adds analyst comments, conference call details)

By Deepti Govind

BANGALORE, Nov 3 (Reuters) - Diebold Inc's (DBD.N) third-quarter results trailed expectations, as the automated teller machines maker faced a drop in financial self-service and security orders, sending its shares down 6 percent.

Diebold, whose customers include banks, financial institutions and government agencies, said total product and service orders for both its segments were down in the low 20 percent range.

"Businesses got a little worse in the third quarter versus the second quarter when a lot of people were expecting them to get a little better," Wedbush Morgan Securities analyst Gil Luria said.

Business in Western Europe was very weak, while Asia and the U.S. weakened further in the third quarter, Luria added.

"I would anticipate 2010, 2011 will still be challenging for vendors selling into those areas," said Aite Group analyst Kate Monahan.

The company said financial self-service orders in Europe, Middle East and Africa (EMEA) fell over 40 percent, echoing rival NCR Corp (NCR.N), which had attributed a 22 percent drop in third quarter EMEA revenue to lower financial service product sales.

Third quarter adjusted profit of 39 cents a share missed market expectations by 2 cents. However, revenue was significantly below analyst estimates and fell 26 percent from last year. [ID:nWNAB9032]

MODERATE TOP-LINE GROWTH SEEN

Diebold expects "moderate top-line growth" and plans to reinstate salary increases for 2010. [ID:nWNAB9138]

Its 2010 forecast is based on anticipations of a slight growth in the financial self-service segment and expected revenue addition from the Brazil election.

"Overall, we still believe our markets reached a low-point earlier this year. While we've not seen any rebound in demand, in most markets we have seen further signs of stability," Chief Executive Thomas Swidarski said on a conference call.