* Q4 EPS $0.35 vs $0.46 year ago, Wall St view $0.32
* Says may restate 2010 EPS, to cut by 7 cents
* Concerns over growth in fixed income rev - analysts
* Investment banking revenue up more than 50 pct (Recasts, adds conference call details, analyst comments, share movement)
Dec 20 (Reuters) - Jefferies Group Inc JEF.N posted a market-beating quarterly profit, but investor concerns over the sustainability of growth if fixed income markets were to slow down and a possible restatement of results pulled its stock down.
A rise in interest rate could eat into the company's fixed income results as wary investors gravitate towards equities.
Jefferies also said its 2010 earnings may be hurt by 7 cents a share if it restates results to account for a difference between its accounts and that of a bank, which cleared fixed income trades for the firm for the past five years.
"These questions are clouding the outlook for the company at a time of significant success," Richard Bove of Rochdale Securities wrote in a note to clients.
Shares of the company fell as much as 3 percent in morning trade to a low of $25.83 on the New York Stock Exchange.
Bove, however, said the company's core expertise has been in trading equities so it is positioned to benefit as risk appetites shift.
"There is valid forward momentum at Jefferies while its peers still struggle with major issues. The stock remains attractive," Bove said.
For the quarter ended Nov. 30, fixed income trading revenue rose 13 percent to $252 million.
Jefferies reported net income of $71 million, or 35 cents a share, in the latest fourth quarter that beat analysts estimates by 3 cents, helped by robust growth in the investment banking and principal transaction segments.
Profit, however, fell 24 percent from $93.5 million, or 46 cents per share, in the year-ago quarter.
Net revenue increased 29 percent to $694.9 million.
Investment banking revenue jumped more than 50 percent to $291.9 million, while principal transactions revenue rose 55 percent to $205.8 million.
New York-based Jefferies, which advised XTO in its $30 billion all-stock takeover by Exxon Mobil (XOM.N), bolstered its workforce and expanded its investment banking services to gain market share from the exit of Lehman Brothers Holdings and Bear Stearns.
Shares of the company, which have risen 18 percent since its weak third-quarter results on Sept. 22, were down about 2 percent at $26.19 in afternoon trade on the New York Stock Exchange. (Reporting by Archana Shankar and Sweta Singh in Bangalore; Editing by Prem Udayabhanu and Gopakumar Warrier)