UPDATE 1-Varian Semiconductor Q3 beats Street; but outlook bleak

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July 24 (Reuters) - Varian Semiconductor Equipment (VSEA.O: Quote, Profile, Research, Stock Buzz) posted quarterly earnings that beat market estimates by a cent, but forecast lower-than-expected fourth-quarter results as overall business conditions slow, sending its shares down 12 percent.

The company said it has taken a number of cost-cutting measures, including a planned shutdown for the last week of August. It will undertake additional shutdowns during the year.

The semiconductor equipment industry is seeing tough times. Sales are likely to fall 20 percent this year due to lower spending in the memory market, according to a midyear forecast by industry group Semiconductor Equipment and Materials International.

Varian posted third-quarter earnings of $18.3 million, or 25 cents a share, compared with $23.4 million, or 29 cents a share, a year earlier. Revenue fell 58 percent to $182.6 million for the period ended June 27.

Analysts on average were expecting earnings of 24 cents a share, before items, on revenue of $180.7 million, according to Reuters Estimates.

Varian Semiconductor expects fourth-quarter revenue between $130 million and $140 million, with earnings slightly above break-even.

Analysts were expecting earnings of 24 cents a share, before items, on revenue of $175.8 million.

Shares of the company fell to $26.00 in trading after the bell. They closed down $1.10 at $29.48 Thursday on Nasdaq. (Reporting by Purwa Naveen Raman in Bangalore; Editing by Pratish Narayanan)