UPDATE 2-Canada's Cascades posts better-than-expected Q3 profit

* Q3 EPS C$0.36 vs est C$0.24

* Q3 rev down 6 percent

* Warns of weak volumes in Q4 (Adds analyst's comments, Updates shares to close)

By Isheeta Sanghi

BANGALORE, Nov 5 (Reuters) - Packaging and paper-products company Cascades Inc (CAS.TO) posted a better-than-expected quarterly profit, helped in part by increased shipments, but warned of lower volumes in the fourth quarter.

"Looking ahead to the fourth quarter, while we are encouraged by the recent improvement in demand and the relative stability of most of our selling prices, we expect lower volumes due to normal seasonality and planned maintenance downtimes," Chief Executive Alain Lemaire said in a statement.

Lemaire expects slightly higher fiber and energy costs for the fourth quarter.

Scotia Capital analyst Benoit Laprade said he is expecting Cascades' fourth quarter to be marginally weaker than the third, due to seasonal weakness and higher energy prices.

"The quarter is young but oil and gas prices are higher than they were in the third quarter," Laprade said. Third quarter profit was C$34 million, or 35 Canadian cents a share, compared with a loss of C$7 million, or 7 Canadian cents a share in the year-ago quarter.

Excluding items, the company, which has three segments -- packaging products, speciality products and tissue papers -- earned C$35 million, or 36 Canadian cents a share.

Sales totalled C$974 million, down from C$1.04 billion last year.

Analysts on average were expecting the Kingsey Falls, Quebec-based company to earn 24 Canadian cents a share, excluding items, on revenue of C$977 million, according to Thomson Reuters I/B/E/S.

Cash flow from operations, excluding specific items, more than doubled from the third quarter of last year to C$95 million, or 7 Canadian cents a share.

Sales from the company's tissue papers segment, rose 2 percent to C$210 million, while sales from both its packaging products and speciality products fell.

"Our shipments increased by 5 percent and we were able to control our fixed and other variable costs to deliver the highest EBITDA in the company's history," Lemaire said.

Cascades expects C$6.1 million in investment credits from the Canadian government's Pulp and Paper Green Transformation Program.

Shares of the company closed up at C$7.74 Thursday on the Toronto Stock Exchange. (Reporting by Isheeta Sanghi in Bangalore; Editing by Pradeep Kurup, Ratul Ray Chaudhuri)