UPDATE 1-Bill Barrett Q3 profit lags Street view

* Q3 adj EPS $0.18 vs est of $0.35

* Q3 revenue down 9.5 percent

* Raises FY production outlook

Nov 3 (Reuters) - Bill Barrett Corp (BBG.N) reported quarterly earnings that lagged market estimates as expenses rose, but the independent oil and natural gas company raised its full-year production outlook.

For the third quarter, net income was $718,000, or 2 cents a share, compared with $35.3 million, or 78 cents a share, a year earlier. Adjusted net income was 18 cents a share.

Total operating revenue fell 9.5 percent to $148.8 million.

Analysts on average were expecting Bill Barrett to earn 35 cents a share, on revenue of $141.4 million, according to Thomson Reuters I/B/E/S.

Total operating expenses were $136.9 million, compared with $101 million a year earlier.

Bill Barrett increased its 2009 production outlook to 88 to 89 billion cubic feet equivalent of natural gas (bcfe), from its prior view of 86 to 88 bcfe.

The company said it still expects full year capital spending of $350 million, excluding acquisitions. It lowered the top end of its lease operating costs outlook range by a cent to 53 cents to 54 cents per thousand cubic feet equivalent (mcfe).

Shares of Bill Barrett closed at $31.51 Monday on the New York Stock Exchange.

For the alerts, please double click [ID:nWNAB8998] (Reporting by Arup Roychoudhury in Bangalore; Editing by Deepak Kannan)