* Q3 EPS $0.38 beats estimates by 5 cents
* Q3 revenue beats expectations
* Sees Q4 adj EPS 37 cents - 47 cents
* Sees Q4 revenue above Street
* Shares up 3 pct after the bell (Recasts; adds earnings outlook from conference call, analyst comments)
BANGALORE, April 23 (Reuters) - Touchscreen technology maker Synaptics Inc (SYNA.O) reported better-than-expected quarterly results, helped by strong demand for its technology used in netbooks, and forecast strong fourth-quarter results.
"Revenue from PC applications exceeded our expectations, and we furthered our penetration of the mobile phone market," Chief Executive Francis Lee said in a statement.
Synaptics saw a 25 percent sequential decline in its revenue from mobile phone applications, even as smartphone sales grew indicating the possibility that the company might be losing market share to its rivals.
However, this decline was offset by an unexpected growth in its largest segment PC application, which accounts for more than half of its revenue.
"They are seeing a lot of growth in netbook markets," ThinkEquity Llc analyst Vijay Rakesh said by phone.
Cheap and light-weight netbooks, which are increasingly using touchscreen technology, represent one of the few bright spots in the downturn-hit PC industry.
Research firm IDC said netbooks could dramatically outperform the overall PC market in 2009. It forecast netbook shipments would grow by about 90 percent this year, compared with a 4 percent decline for the overall sector.
Netbooks carry lower demand market and is not something that everybody wants to focus on, Rakesh added.
The company forecast fourth-quarter earnings of 37 cents to 47 cents a share, excluding items, on revenue of $105 million to $115 million.
Analysts were expecting earnings of 36 cents a share, excluding items, on revenue of $102.4 million.
Touchscreens have gained in popularity since the success of Apple Inc's (AAPL.O) iPhone.
For the third quarter ended March 31, net income increased to $6.1 million, or 17 cents per share, from $3.0 million, or 8 cents per share, a year earlier.
Excluding non-cash charges for share-based compensation and impairment of auction rate securities, the company reported earnings of 38 cents per share.
Revenue rose 28 percent to $100.6 million.
Analysts on average were expecting earnings of 33 cents a share, excluding exceptional items, on revenue of $93.7 million, according to Reuters Estimates.
Shares of the company, which have risen 90 percent since the beginning of the year, were up 3 percent at $32.70 in trading after the bell. They had closed at $31.72 Thursday on Nasdaq. (Reporting by Shrutika Verma in Bangalore; Editing by Anne Pallivathuckal and Saumyadeb Chakrabarty)