UPDATE 1-GuestLogix results lag expectations, stock drops

* Sales of mobile retail device miss analysts' estimate

* Stock falls 10 percent to C$1.20 on TSX Venture Exchange

* Company remains "optimistic" on growth prospects

OTTAWA, Oct 15 (Reuters) - GuestLogix Inc (GXI.V) shares fell 10 percent on Thursday after the Canadian company reported disappointing quarterly profit and sales figures for the onboard retail technology it sells to airlines and railways.

GuestLogix software and handheld devices are used by such carriers as American Airlines (AMR.N) and WestJet Airlines (WJA.TO) to allow passengers to show tickets and buy food and other merchandise with credit cards while on board.

While its third-quarter results fell short of expectations, GuestLogix said it is well positioned to improve its financial results and be consistently profitable based on growth prospects at its airline and rail customers.

GuestLogix broke even in the quarter, lagging analysts' expectation of a 1 Canadian cent a share profit. Revenue of C$4.8 million ($4.6 million), up 100 percent from the same period last year, missed the consensus estimate of C$5.2 million, according to Thomson Reuters I/B/E/S.

Shares in the Toronto-based company were down 14 Canadian cents at C$1.20 on the TSX Venture Exchange on Thursday. Of the six analysts who follow the company, four rate the stock a "strong buy" and two a "buy".

"We remain optimistic about the long-term growth prospects of the business within the airline industry. More airlines are embracing a la carte pricing and recent reports indicate that travel demand may be slowly recovering," said Chief Executive Tom Douramakos on a conference call with analysts.

"This is a positive sign for us, given we now have a market share of approximately 35 percent of airline traffic worldwide."

In 2010, GuestLogix said it will try to expand in the lucrative rail industry and Asian Pacific airline market.

"GuestLogix continues to build market share, which we believe is a priority in a greenfield market, and therefore profitability, at least in the short term, takes a back seat to growth," said Fraser Mackenzie analyst John Safrance in a note.

($1=$1.03 Canadian) (Reporting by Susan Taylor; editing by Peter Galloway)