UPDATE 2-Vasco Q3 results beat market view; shares jump

* Q3 EPS $0.24 vs estimate of $0.16

* Q3 revenue rose 32 pct to $39.7 mln

* Sees 15-25 pct revenue growth for 2008

* Shares jump 34 pct (Adds conference call details, stock movement)

Oct 23 (Reuters) - Internet-security software company Vasco Data Security International Inc (VDSI.O) reported better-than-expected quarterly results helped by an increase in new customers and strong order flow, sending its shares up as much as 34 percent.

The Oakbrook Terrace, Illinois-based company said it added 365 new customers during the period, of which 62 were banks.

"Even though the banking industry is going through a period of major change, our products continue to be very well positioned to help banks reduce their costs," Chief Executive Officer Kendall Hunt said.

"Our expanding product portfolio allows us to target larger new accounts than before," Hunt said.

Vasco, which makes hardware and software for security systems, reported third-quarter earnings of $9.1 million, or 24 cents a share, compared with $5.9 million, or 15 cents a share, a year ago.

Revenue rose 32 percent to $39.7 million.

Analysts on average had expected earnings of 16 cents a share, before special items, on revenue of $36.9 million, according to Reuters Estimates.

The company also said it continues to see revenue growth of 15 percent to 25 percent and operating margin in the range of 20 percent to 25 percent for 2008.

Analysts on average were expecting revenue of $142.3 million for the full year.

Vasco shares were up $1.579 at $9.08 in afternoon trade on Nasdaq. They rose to as much as $10.00 earlier in the session.

BANKING PUSH

On the current financial meltdown, Vasco expects banks to place more emphasis on Internet banking as a more cost-effective approach to opening branch offices.

The company said it expects banking customers to open accounts in multiple banks to maximise the protection under various government guarantee programs which could increase demand for its products.

Vasco is looking at expanding its workforce to focus more on new accounts, it said in a conference call with analysts.

Robert Breza, analyst at RBC Capital Markets, raised the stock to 'sector perform' from 'underperform' but maintained his price target of $11.

FBR Capital Markets analyst Daniel Ives raised his price target on the stock by $1 to $12 and kept his 'outperform' rating, and said Vasco's operating model has helped it in building up a strong product pipeline. (Reporting by Kuganandhan Paramanandan in Bangalore; Editing by Anil D'Silva and Gopakumar Warrier)