UPDATE 2-Express Scripts net slips; ups low end of forecast

* Q3 EPS $0.81 excluding items vs Street $0.80

* Revenue $5.62 bln vs Street $5.54

* Expects to close NextRx deal in 4-6 weeks

* Shares down 0.2 pct after hours (Adds outlook, analyst's comment, generic use, share price)

By Bill Berkrot

NEW YORK, Oct 28 (Reuters) - U.S. pharmacy benefit manager Express Scripts Inc (ESRX.O) on Wednesday reported slightly lower third-quarter profit as higher costs offset a rise in revenue, but the company raised the low end of its full-year earnings forecast by 4 cents a share.

Citing strong underlying fundamentals in its core business, the company said it now expects to earn $3.76 to $3.82 per share, excluding items, but its shares edged 0.2 percent lower in extended trading.

The St. Louis-based company posted net income of $197.6 million, or 71 cents per share, compared with a profit of $201.9 million, or 81 cents per share, a year ago.

Excluding one-time items, such as costs related to its pending acquisition of WellPoint Inc's (WLP.N) pharmacy benefit business and a legal settlement, Express said it earned 81 cents per share, topping analysts' average expectations by a penny, according to Thomson Reuters I/B/E/S.

"The numbers look strong both for the quarter and the year," said Gabelli & Co analyst Jeff Jonas.

He said shares might be trading a bit lower because investors have high expectations based on past performance.

"This is a company that frequently beats (expectations) and raises guidance. They did a little bit, but maybe not as much as historically," Jonas said.

Express said it expects to close the $4.68 billion acquisition of WellPoint's NextRx business in the next four to six weeks. The company said 2009 financing costs related to the deal would amount to 41 cents per share.

"Getting that NextRx deal closed in four to six weeks is a positive. That's going to be nicely accretive in 2010," Jonas said.

Pharmacy benefit managers, or PBMs, administer prescription drug benefits for employers and health plans and operate large mail-order pharmacies.

Revenue for the quarter rose 3 percent to $5.62 billion, surpassing Wall Street estimates of $5.54 billion.

Use of generic drugs, which have a higher profit margin than expensive branded medicines, rose to 68.3 percent from 66.2 percent in the year-ago quarter.

Express shares slipped to $77 in after-hours trading from their Nasdaq close at $77.20. (Reporting by Bill Berkrot, editing by Leslie Gevirtz)