UPDATE 2-Logica Q3 sales fall 4 pct, lowers year forecast

* Q3 revenue 862 million pounds, pro forma drop of 4 percent

* Expects year revenue to fall 3 percent

* Maintains margin guidance at 7.5 percent

* Shares rise 3.8 percent in London

(Adds company comment, analyst reaction, shares)

By Paul Sandle

LONDON, Nov 4 (Reuters) - IT company Logica (LOG.L) (LOG.AS) cut its full-year guidance, saying revenue would fall 3 percent rather than an earlier forecast of about 2 percent, reflecting continued weak demand for consulting and professional services.

Logica, listed in Amsterdam and London, posted revenue of 862 million pounds ($1.4 billion) for the three months to end-September, 4 percent lower on a pro forma basis but just ahead of analyst expectations.

Outsourcing grew 11 percent, not enough to offset a 12 percent drop in consulting revenue with particular weakness in the industrial and financial sectors in Benelux and Germany.

"Outsourcing remains the key growth area for this industry as clients continue to focus on cost reduction in their businesses," finance director Seamus Keating told reporters.

Logica, which competes with Cap Gemini (CAPP.PA) and Tieto (TIE1V.HE), is stepping up its cost-saving programme, particularly in Benelux where it will cut more jobs and reduce the use of contractors. Logica has shed 2,200 jobs since the beginning of 2008.

GUIDANCE NO SURPISE

Shares in the group, which has outperformed British peers .FTNMX9530 by 7 percent since the start of the year, were 3.8 percent higher in London and 4.0 percent higher in Amsterdam by 0940 GMT, as the lowered guidance came as little surprise.

Analysts had already taken a more pessimistic stance than the company and were expecting a revenue fall of about 4 percent. "Overall we believe this is a solid Q3 performance relative to expectations," Casenove said in a note.

"The risk continues to be that UK public sector work will slow next year and the commercial business will not recover as expected thereby leading to further revenue decline."

Logica is forecast to report full-year revenue of 3.67 billion pounds and pretax profit of 180.6 million pounds, according to Thomson Reuters I/B/E/S data.

Keating said the group had good visibility on orders for the remainder of the year, and was confident the decline had stabilised. "Looking at where we are today and the visibility we have got, we are quite comfortable we will be around 3 percent decline for the year," he said. Margin guidance remained unchanged at about 7.5 percent.

Britain, where more than half of revenue comes from the public sector, was the only region to grow in the quarter.

Keating said next year's British election would slow public sector contracts, but the long-term outlook was positive.

"The ability of Government to use automation to use shared service centre driven by technology will be an important aspect in reducing the cost of delivering public services," he said. (Editing by Dan Lalor) ($1 = 0.6071 pound)