UPDATE 2-Transocean Q3 profits slides 33 pct, shares down

* Q3 EPS ex-items of $2.65 lags Wall St view $2.67

* Revenue off 12 percent at $2.82 billion

* Dayrates earned out of backlog heading higher in Q1

* Shares fall 1.8 pct (Add dayrate outlook, shares)

NEW YORK, Nov 4 (Reuters) - Transocean Ltd (RIG.N) posted a 33 percent drop in quarterly profit on Wednesday as the largest offshore drilling contractor had to pull more rigs from the jackup market, offsetting strength in deeper waters, and its shares fell 1.8 percent.

Transocean also expected the dayrates its rigs would earn out of backlog to edge higher in the next quarter.

In a presentation of third-quarter results, the company said the weighted average contract dayrate for high-specification floaters would be $419,000 in the fourth quarter and $423,000 in the first quarter.

Midwater rates would be $343,000 this quarter and $335,000 the next, while shallow-water jackup dayrates would be $155,000 in the fourth quarter and $161,000 the next, Transocean said.

Third-quarter net profit fell to $710 million, or $2.19 per share, from $1.06 billion, or $3.30 per share, in the same quarter a year before.

Excluding charges for legal issues, asset impairments, debt retirements and a gain from tax items, Transocean's earnings per share of $2.65 fell short of the $2.67 per share that analysts had on average forecast, according to Thomson Reuters I/B/E/S.

Revenue fell 12 percent to $2.82 billion, slightly below the $2.85 billion that analysts had forecast.

Shares of Transocean fell 1.8 percent to close at $84.41 on the New York Stock Exchange.

Transocean said this week that it had set aside two more shallow-water jackup rigs, while finding a taker for an idle midwater floating rig at an improved rate. [ID:nN02321954] (Additional reporting by Braden Reddall in San Francisco, editing by Maureen Bavdek and Tim Dobbyn)