UPDATE 2-Dolby Q3 results top estimates; ups FY10 view

* Q3 EPS $0.55 vs $0.44 last year

* Q3 rev up 34 pct at $230.3 mln vs est $209 mln

* Raises FY10 view above Street (Recasts; adds details, comments from conference call)

BANGALORE, July 29 (Reuters) - Dolby Labs Inc's (DLB.N) quarterly results beat market view, helped by strong licensing sales, and the audio technology licensor raised its full-year outlook above Wall Street estimates as it looks to benefit from growth in its PC and broadcast markets.

In its PC market, the company continues to see growth of Dolby Digital Plus, its next-generation audio format, with the global ramp up of Windows 7, Microsoft Corp's (MSFT.O) newest operating system.

For Dolby, personal computers -- including software DVD players and Microsoft Windows operating systems -- has been a big growth driver over the past few years.

The company, which is almost synonymous with audio technology licensing, earns royalties from the sale of Windows 7, which includes Dolby technologies in four of the six available editions, and earned 35 percent of its licensing revenue for fiscal 2009 from its personal computers segment.

On July 22, Microsoft said it has sold 175 million licenses for its new Windows 7 operating system since its launch last October. [ID:nN21206486]

Dolby, which counts Samsung Electronics (005930.KS) and Sony (6753.T) among its customers, now sees 2010 adjusted earnings between $2.57 a share and $2.63 a share, on sales of $890 million to $905 million.

The outlook is above its prior view for adjusted earnings of $2.47 a share to $2.57 a share, on sales of $865 million to $895 million.

Analysts were expecting earnings of $2.32 per share on revenue of $886.1 million, according to Thomson Reuters I/B/E/S.

STRONG Q3 RESULTS

Dolby, whose technology is used in DVD players, Blu-ray devices, televisions and personal computers, said it made progress in important growth markets, including broadcast, in the third quarter.

For the quarter, it earned $63.5 million, or 55 cents a share, compared with $51.1 million, or 44 cents per share, a year ago.

Excluding items, Dolby earned 62 cents a share.

Analysts were looking for earnings of 50 cents a share, excluding special items.

Revenue rose 34 percent to $230.3 million, helped by a 20 percent jump in sales at its licensing segment.

"The year-over-year increase was driven by our PC and broadcast markets," Chief Financial Officer Murray Demo said on a call with analysts.

Revenue from Dolby's PC market grew 40 percent during the quarter.

Shares of the company were up 1.3 percent at $66.70 in extended trading. The shares, which have gained over 30 percent in the past six months, closed at $65.84 Thursday on the New York Stock Exchange. (Reporting by Saqib Iqbal Ahmed in Bangalore; Editing by Roshni Menon and Maju Samuel)