UPDATE 3-McCormick profit rises along with costs

(Adds conference call, paragraphs 6-7)

By Sarah Coffey

NEW YORK, Sept 27 (Reuters) - Spice maker McCormick & Co. Inc (MKC.N: Quote, Profile, Research, Stock Buzz) reported better-than-expected quarterly profit on Thursday, bolstered by increased sales volume in Europe and Asia, but said it would raise prices to offset higher costs.

Gross profit margin will continue to be under pressure through the remainder of the fiscal year, the company said.

Net income for the fiscal third quarter, ended Aug. 31, rose to $56.8 million, or 43 cents per share, from $43 million, or 32 cents per share, a year earlier.

Excluding restructuring charges, the company reported a profit of 45 cents. On that basis, analysts on average had expected 43 cents a share, according to Reuters Estimates.

Sparks, Maryland-based McCormick said it will continue to raise prices to offset higher material costs in its industrial business, which is less profitable than its retail arm and accounts for about half of its annual sales.

"Our industrial business is in a period right now where it's under pressure with steep cost increases for several commodities and a general weakness in the restaurant industry," Chief Executive Officer Bob Lawless said on a call with analysts.

Commodity costs are expected to remain at a high level through the fourth quarter, Lawless said.