UPDATE 2-Cymer Q3 beats market, shares fall on weak Q4 rev view

* Q3 EPS $0.36 vs $0.17 est

* Rev falls 17 pct

* Sees Q4 rev comparable to Q3

* Shares fall as much as 4 pct after the bell (Adds analyst's comments, share movement)

By Manasi Phadke

BANGALORE, Oct 20 (Reuters) - Semiconductor equipment maker Cymer Inc (CYMI.O) doubled its third-quarter profit and beat Wall Street expectations, helped by higher demand for some of its products and lower expenses.

However, shares of the company fell as much as 4 percent to $37.35 in trading after the bell, as the company gave a weak fourth-quarter revenue outlook. They closed at $38.85 Tuesday on Nasdaq.

For the fourth quarter, Cymer expects revenue to be comparable to the third quarter and gross margins to be 47 percent to 48 percent, it said in a statement.

The company posted third-quarter gross margins of 48 percent.

Analysts were expecting Cymer to post revenue of $90.6 million in the fourth quarter, according to Thomson Reuters I/B/E/S.

"The guidance was based on uncertainty from Cymer's point of view," Soleil Analytical Investments analyst Nikolay Tishchenko said. "They are trying to play it safe."

The company would probably raise its outlook towards the end of the quarter, the analyst said, and added he expects chip equipment makers to post a significant growth in the fourth quarter and in 2010.

The company, which develops light sources used by chipmakers, earned $10.8 million, or 36 cents a share, compared with $5.3 million, or 18 cents a share, a year ago.

However, revenue fell 17 percent to $92.3 million.

Analysts were expecting earnings of 17 cents a share on revenue of $82.2 million.

Operating expenses fell 24 percent to $29.1 million.

Demand for light sources and installed base products rose sharply during the quarter and the company expects this increased level of demand to continue in the fourth quarter as well, it said in a statement.

(Reporting by Manasi Phadke in Bangalore; Editing by Unnikrishnan Nair)