* Earnings helped by cost-cutting efforts
* Cautions order decline will hit Q4, 2010 results
* Shares rise some 6 percent, outperform sector
ZURICH, Oct 27 (Reuters) - Cost-cutting helped Swiss lift and escalator maker Schindler to a forecast-beating 11 percent rise in third-quarter net profit but a fall-off in new installations would weigh on earnings in the last three months and into next year.
Net profit rose to 176 million Swiss francs ($175 million), ahead of the average forecast of 149 million francs in a Reuters survey of seven analysts.
"Like its competitors, Schindler clearly demonstrated a strong operating performance and exceeded expectations," Vontobel analyst Serge Rotzer said in a note.
"The reasons are a strong order backlog, adjustment of the capacity and cost structure as well as a reduction in the cost of materials," Rotzer said, and upgraded the stock to "buy" from "hold".
At 0933 GMT, Schindler's stock was trading 5.0 percent higher at 73.50 Swiss francs, easily outperforming a 0.2 percent rise in the Swiss mid-cap index.
Finnish rival Kone has also posted better-than-expected third-quarter earnings as cost cuts bolstered its bottom line.
Schindler, which is late-cyclical, cautioned the decline in orders received in the new installations business in the first nine months of the year due to slower construction activity would hit fourth-quarter results and also weigh in 2010.
"Further restructuring projects are currently being implemented to prepare the core business for lower volumes in the area of new installations," the group said in a statement, adding additional costs of a maximum of 20 million francs were expected in the fourth quarter.
"It is anticipated that further recession-related costs will be incurred in 2010," Schindler said.
The group expects 2009 net profit to be slightly above 600 million francs after the deduction of restructuring costs. (Reporting by Katie Reid; Editing by David Cowell) ($1=1.005 Swiss Franc)