UPDATE 3-Rofin-Sinar Q4 beats Street; targets Q1 profitability

* Q4 EPS $0.18 vs est $0.01

* Says targets to be profitable in Q1

* Sees Q1 rev nearly $85 mln

* Sees 2010 rev $375 mln-$385 mln

* Shares rise 16 pct (Adds details; updates share movement)

Nov 5 (Reuters) - Laser-based tools maker Rofin-Sinar Technologies Inc (RSTI.O) posted fourth-quarter results that handily beat estimates, helped by lower expenses, and said it targets to be profitable in the first quarter, sending its shares up more than 15 percent.

The company, which had posted a loss in the third-quarter, has seen the economic slowdown hurt its industrial clients.

"I would not give a red light to any of the industries we serve," Chief Executive Gunther Braun said on a conference call with analysts.

"But for the following industries, I see currently a sort of yellow light... tool industry, the automotive supplier and the jewelry business," he added.

For the first quarter, the company forecast revenue of "nearly" $85 million, compared with analyst estimates of revenue of $88.4 million.

The company expects 2010 revenue of $375 million to $385 million, while analysts were expecting $368.1 for the period.

"Many of the markets that we serve are showing improved activity levels," Chairman Peter Wirth said in a statement. "We believe this is a positive sign of a market recovery and we are therefore cautiously optimistic about our future growth potential."

The company said its order entry is improving, and rose by 18 percent from third quarter, before the cancellation of orders mainly recorded in the prior fiscal year.

For the latest fourth quarter, net income was $5.3 million or 18 cents a share, compared with $20.0 million or 68 cents a share a year ago.

Net sales fell 41 percent to $90.5 million.

Analysts on average had expected earnings of 1 cent per share, before special items, on revenue of $80.2 million, according to Thomson Reuters I/B/E/S.

Sales increased sequentially due to a rebound in the service and parts segment and the company's businesses in China which benefitted from stimulus spending during the quarter, CEO Braun said. Operating expenses fell 13 percent to $21.7 million while research and development expenses fell 40 percent to $6.7 million.

The company whose laser marking brands include Multiscan, Powerline and StarMark series, said its order backlog, mainly for laser products, stood at $87.6 million at Sept. 30.

Rofin-Sinar shares were up 13 percent at $24.61 on the New York Stock Exchange. They had earlier touched a high of $25.13. (Reporting by Divya Sharma in Bangalore; Editing by Gopakumar Warrier and Aradhana Aravindan)