UPDATE 2-Russia Vimpelcom earnings soar, but miss fcast

(Adds details, quotes, share price, analysts' comments)

MOSCOW, March 12 (Reuters) - Vimpelcom (VIP.N), Russia's No.2 mobile phone operator, on Wednesday posted an 86 percent jump in fourth-quarter net profit but fell short of market expectations and saw its shares fall by about 5 percent.

The net profit, in U.S. GAAP terms, was up to $368.1 million against an average forecast of $401.5 million in a Reuters poll of nine analysts.

Operating income before depreciation and amortisation (OIBDA) rose 33 percent to $918.4 million, also well below the market expectation of $996.4 million.

The OIBDA margin fell to 45.7 percent from 47.5 percent a year ago, below analysts' forecasts of about 49.3 percent.

"This shortfall to expectations was primarily due to higher than expected expenses related to stock-based compensation for management, which is a non-cash and non-recurring item," analysts from Uralsib Bank wrote in a results review.

Vimpelcom's Chief Executive Officer Alexander Izosimov told reporters the expenses amounted to $118.7 million in the fourth quarter, up by $78.2 million from the third quarter and by $94.5 million over the fourth quarter of 2006.

"As the share price rose by more than 50 percent in the fourth quarter, allocations to stock-option programmes increased. This has no burden on the company's cash flow," Izosimov said.

Without those expenses, Vimpelcom's OIBDA margin would have exceeded 50 percent, the company said.

Shares in Vimpelcom have soared on the back of strong third-quarter results and its merger with fixed-line operator Golden Telecom, which is expected to give it a strong position in the rapidly growing broadband market and bring synergies from product bundling.

Izosimov said Vimpelcom planned to start incorporating the financial results of Golden Telecom from the first quarter.

By 1710 GMT, Vimpelcom's shares were down 4.98 percent at $32.99.

"Publication of Vimpelcom's Q4 results, which are far from impressing the market, could in fact trigger a short-term correction," Uralsib said.

REVENUES RISE

Vimpelcom, owned by Russian Alfa Group and Norway's Telenor (TEL.OL), said revenues were up 38 percent to $2.01 billion, but again missed the analysts' average forecast of $2.025 billion.