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UPDATE 1-Square third-quarter profit forecast falls short on higher Cash App spending

spending@ (Adds details on forecast, share movement)

Aug 1 (Reuters) - Square Inc forecast third-quarter profit below analysts' estimates on Thursday as it spends heavily on its Cash App business to fend off rivals such as PayPal Holdings Inc's Venmo, sending its shares down 6% in extended trading.

The company, founded and led by Twitter Inc Chief Executive Officer Jack Dorsey, also said it would sell its food-ordering platform Caviar to DoorDash for $410 million in cash and preferred stock.

Square's Cash App allows users to send money to each other for free. The app charges fees to businesses when users choose to instantly deposit money from the app into their bank accounts.

The company said it expects adjusted earnings per share of between 18 cents and 20 cents for the third quarter, below analysts' expectations of 22 cents, according to IBES data from Refinitiv.

The company said net loss widened to $6.7 million, or 2 cents per share, in the three months ended June 30 from $5.9 million, or 1 cent per share, a year earlier. (https://bit.ly/2Yywrb3)

On an adjusted basis, the company earned 21 cents per share, while analysts had expected a profit of 17 cents.

Total net revenue rose 44% to $1.17 billion. (Reporting by C Nivedita in Bengaluru; Editing by Sriraj Kalluvila)