* Wal-Mart Q3 oper shr 77c vs. 76c analysts' view
* Sees Q4 shr $1.03-$1.07 vs $1.11 analysts' view
* Sees FY shr $3.42-$3.46 vs pvs view $3.43-$3.50
* Cites "rapid changes" in currency exchange for new view
* Shares down 1.1 pct (Adds analyst comments, updates stock price)
By Nicole Maestri
NEW YORK, Nov 13 (Reuters) - Wal-Mart Stores Inc reported a slightly better-than-expected 10 percent rise in quarterly profit on Thursday as shoppers scoured its aisles for discounts on groceries and medicine in the face of deteriorating economic conditions.
But the world's largest retailer, which garners roughly 25 percent of its sales internationally, forecast fourth-quarter earnings that could miss Wall Street targets, and lowered its full-year profit view. It cited pressure from the stronger U.S. dollar, which lowers the value of its international sales.
"I think investors by and large will look through that to some extent to say, 'This is beyond their control,' and look at their underlying fundamentals," said Jefferies & Co analyst Dan Binder.
Wal-Mart's rising profits stand in stark contrast to competitors, whose businesses have been upended by a sharp decline in consumer spending. This week, consumer electronics retailer Circuit City Stores Inc filed for bankruptcy, while Best Buy Co Inc slashed its profit forecast, citing "seismic changes in consumer behavior."
Wal-Mart's Chief Executive Officer Lee Scott said the retailer is gaining momentum and he is "optimistic" despite entering what some economists are forecasting will be the worst holiday sales season in nearly 20 years.
"It is our time," he said on a recorded call.
Wal-Mart reported net income of $3.14 billion, or 80 cents per share, for the third quarter that ended Oct. 31, up from $2.86 billion, or 70 cents per share, a year earlier.
The company said earnings from continuing operations were 77 cents per share. It had previously forecast 73 cents to 76 cents, and analysts on average had been expecting 76 cents, according to Reuters Estimates.
Its shares slid 55 cents, or about 1 percent, to $52.05 on the New York Stock Exchange.
WAL-MART GAINS WITH SHOPPERS
Wal-Mart's sales have outpaced competitors this year as cautious consumers adopt a thrifty attitude and try to stretch their dollars by shopping in its stores, especially for necessities like groceries and toiletries.
Wal-Mart has also been lowering prices, sprucing up stores and improving its merchandise selection to win shoppers during the downturn.
"The bottom line is they're continuing to take market share, they're continuing to operate very well all around the world," said Joseph Feldman, a retail analyst with Telsey Advisory Group.
Quarterly U.S. sales, which include the namesake stores and its Sam's Club warehouse division, rose more than 6 percent to $72.78 billion. International sales rose 11.2 percent to $24.86 billion.
Sales at U.S. stores open at least a year rose 3 percent overall, with increases of 2.7 percent at the company's namesake stores and 4.5 percent at the Sam's Club division.
Eduardo Castro-Wright, head of Wal-Mart's U.S. operations, said consumers were being more cautious with discretionary purchases of electronics.
CURRENCY EXCHANGE RATES A HEADWIND
Wal-Mart forecast fourth-quarter earnings per share of $1.03 to $1.07 from continuing operations -- below analysts' expectations of $1.11 -- on U.S. same-store sales growth of 1 percent to 3 percent.
"The rapid changes in currency exchange rates during the last few weeks are projected to negatively affect this year's fourth-quarter results by approximately 6 cents per share," Chief Financial Officer Tom Schoewe said in a statement.
Wal-Mart operates stores in foreign markets including Canada, China, Mexico, Japan and Britain.
A weaker dollar boosts profits of U.S. multinational companies when their foreign revenue is converted into greenbacks. But the dollar has risen against an index of major currencies, eliminating some of that benefit.
"With 25 percent of sales coming from foreign markets, it wasn't a big surprise," Christian Andreach, a managing director at money manager Manning & Napier Advisors, said of the warning.
For the full year, Wal-Mart now expects earnings per share of $3.42 to $3.46 from continuing operations, compared with a previous view of $3.43 to $3.50.
Wall Street expected full-year profit of $3.49 per share. (Editing by Lisa Von Ahn and Maureen Bavdek)