UPDATE 1-Compal strong Q3 raises hopes for HP, Dell

* Q3 net profit T$5.1 bln, beating T$3.8 bln forecast

* Revenue up 57 percent, pointing to stronger PC sales

* Shares up 130 percent this year, beats main board (Adds details, quotes)

TAIPEI, Oct 28 - Compal, the world's No. 2 contract laptop PC maker, blew past market forecasts for its third-quarter earnings, raising expectations for a strong performance from clients such as HP and Dell.

The firm also said it expected demand for notebook PCs in the current three months would beat its own previous expectations of 10 percent sequential shipment growth, fuelling optimism for strong consumer buying in the pre-Christmas shopping season.

"We continue to maintain a positive view on 4Q09 notebook PC demand, which is stronger than our original expectations," the firm said in a statement posted on its website www.compal.com.

"We also believe it will be a good notebook year in 2010."

Compal said it made a net profit of T$5.14 billion Taiwan ($160 million) in the July-September quarter, soundly beating market estimates for a T$3.8 billion net profit, according to a survey of 19 analysts polled by Thomson Reuters I/B/E/s.

The results were also better than the T$3.5 billion recorded during the same period a year ago.

Significantly, revenue climbed more than 57 percent to T$173 billion, underscoring the strong results could be a result of a return in consumer confidence and growth in demand for tech buys rather than cost-cutting measures.

"There's a sense that consumer confidence is returning, but the results was really way above most expectations," said Vincent Chen, an analyst at Yuanta Securities.

The firm will give further guidance at an investor conference after trading hours on Thursday.

Compal and its larger rival Quanta together make more than half of all the world's laptop PCs, and their earnings figures give a clue to the sector's health and demand from top brands such as Lenovo and Acer.

The company's shares have climbed more than 130 percent so far this year, beating the roughly 60 percent advance on the benchmark TAIEX share index. ($1=32.49 Taiwan Dollar)