CORRECTED - UPDATE 2-Piper Jaffray posts profit on stronger trading

(Corrects paragraph 10 to show fixed income revenue compared with year-earlier negative revenue)

* Net profit $0.47/shr; Street view profit $0.40

* Gains driven by trading, institutional brokerage

* Advisory lagging other investment bank businesses (Adds details, byline, recasts first paragraph)

By Joe Rauch

CHARLOTTE, N.C., Oct 21 (Reuters) - Piper Jaffray Cos Inc (PJC.N), an investment bank and securities firm catering to small and mid-size companies, reported a third-quarter profit that beat analysts' expectations, as revenues improved in institutional brokerage and some investment banking businesses.

The Minneapolis-based firm reported net income of $9.7 million, or 47 cents per share, compared with a year-earlier loss of $27.5 million, or $1.75 per share.

Analysts on average were expecting earnings of 40 cents per share, according to Thomson Reuters I/B/E/S.

Revenue from continuing operations increased by 62.8 percent to $119.7 million. Noninterest expenses declined 11 percent to $71.8 million.

Piper Jaffray has now reported two straight quarters of net profits after five consecutive quarterly losses dating back to the start of 2008. Earnings have rebounded as the U.S. capital markets business saw a flurry of activity throughout the summer as the economy began to recover.

Total investment bank revenue of $48.4 million was down 4 percent from a year earlier and down 23 percent from the second quarter.

A steep decline in advisory revenue -- it dropped 53 percent to $10 million during the quarter -- was offset by revenue gains in Piper's other business segments.

During the quarter, the firm closed 24 equity financings totaling $4.5 billion and 150 tax-exempt issuances totaling $2.4 billion in par value, while the investment bank closed six merger and acquisition transactions totaling $500 million in deal value.

Piper Jaffray's institutional brokerage business reported net revenue of $63.5 million, spiking from $18 million a year earlier, when the financial crisis had begun to crest.

In the brokerage business, fixed income revenue jumped to $32.1 million from $17.3 million in negative revenue in third quarter 2008. The negative revenue was driven by a $21.7 million loss due to a trader option bond program.

The fixed income division fared better than equities, down 11 percent at $31.4 million.

Equity financing revenues increased 56 percent to $17.8 million, and fixed income financing rose 15 percent to $20.5 million.

Piper Jaffray shares increased 9.3 percent during the third quarter, a lower price appreciation than some of its competitors. (Reporting by Joe Rauch; Editing by Lisa Von Ahn)