UPDATE 2-First American Q3 profit tops market, sees weak Q4 rev

* Sees sequentially lower Q4 rev

* Q3 EPS, ex items $0.64 vs estimate $0.63 * Posts profit in title insurance, service segments

* Q3 closed orders rose 12 pct

* Shares fall as much as 4 pct (Adds conference call details, updates stock movement)

Oct 29 (Reuters) - First American Corp (FAF.N) posted a strong quarterly profit, aided by gains in title insurance and services segment, but forecast a sequential decline in fourth-quarter revenue, sending its shares down as much as 4 percent.

On a conference call with analysts, the company said it expects its financial services group, which would be spun off in 2010, to pay out a yearly dividend of $24 million, post the spin off. First American would continue its $82 million annual dividend till then.

In January 2008, First American had said it would spin off its financial services business, which includes worldwide residential and commercial title operations, home warranty and homeowner insurance businesses, and its trust and banking services.

First American, a top U.S. title insurer, posted third-quarter earnings of $55.4 million, or 59 cents a share, compared with a loss of $8.3 million, or 9 cents a share, a year back. Excluding certain charges, it earned 64 cents a share.

Analysts on average were looking for a profit of 63 cents a share, before exceptional items, according to Thomson Reuters I/B/E/S.

Total revenues for the quarter rose 3 percent to $1.6 billion.

Title insurance and services segment posted a pre-tax income of $58.5 million for the period, compared with a pre-tax loss of $33.7 million last year.

Title insurance guarantees that property owners have title to property and can legally transfer that title. Many lenders require that buyers have the insurance before extending loans.

Earlier on Thursday, First American's smaller rival Stewart Information Services Corp (STC.N) posted a narrower third-quarter loss, helped by an increase in title revenues. [ID:nBNG168781]

Shares of the Santa Ana, California-based company were down 2 percent at $30.68 in afternoon trade Thursday on the New York Stock Exchange. They hit a low of $29.91 earlier in the session. (Reporting by Anurag Kotoky in Bangalore; Editing by Pradeep Kurup)