UPDATE 2-Beam tops Wall Street view, keeps 2012 profit target

* Profit of 62 cents a share exceeds Wall St view of 55 cents

* Stands by forecast for low double-digit profit growth

* Investigating business practices in India

* Shares up as much as 5.7 percent

Nov 2 (Reuters) - Beam Inc posted a bigger-than-expected third-quarter profit on Friday, helped by strong demand for its bourbon, and said it still expected earnings to grow at a low double-digit percentage rate this year.

The maker of Jim Beam and Maker's Mark bourbons said fourth-quarter earnings would probably fall as it spends more on advertising during the holiday season. It also said it was investigating allegations of financial lapses at its operations in India, after a report of possible violations of the U.S. Foreign Corrupt Practices Act.

Shares of Beam were up 4 percent to $57.78 after rising as much as 5.7 percent following the company's earnings, which came in well ahead of analysts' expectations.

``From a stock perspective, we would have liked to see the company flow some of the (third-quarter) upside through to the bottom line,'' SunTrust analyst Bill Chappell said in a note. ``However, it appears Beam has decided to reinvest it into marketing and advertising for the key upcoming holiday period.''

Beam said that it is investigating how its small Indian business has been operating and is looking at what changes it may need to make to ensure that it is complying with applicable laws. A possible drop in business there related to the matter is already included in its forecast for the year.

Beam plans to increase brand-building spending at a double-digit percentage rate for a third year in a row in 2012, and a large chunk of those expenses is set to come in the current quarter. The company expects them to rise more than 20 percent in the fourth quarter from a year earlier, Chief Executive Officer Matt Shattock said in a statement.

Through the first three quarters of the year, Beam has seen comparable sales growth of 8 percent in Jim Beam, 23 percent in Maker's Mark and 15 percent in Courvoisier. Pinnacle Vodka has grown 22 percent since Beam bought it in June.

Earnings from continuing operations were $91.7 million, or 57 cents per share, in the third quarter, compared with a loss of $82 million, or 53 cents per share, a year earlier.

Excluding charges and gains, Beam earned 62 cents per share from continuing operations, up from 53 cents a year earlier and topping the analysts' average forecast of 55 cents, according to Thomson Reuters I/B/E/S.

Net sales rose 8.3 percent to $627.5 million. Comparable sales, which strip out the impact of foreign exchange, acquisitions and divestitures, rose 4 percent.

Comparable sales rose 2 percent in North America, 5 percent in the Europe/Middle East/Africa region, and 10 percent in the Asia Pacific/South America region.

Beam stood by the full-year outlook it gave in August, which calls for earnings to increase by a low double-digit percentage rate. That forecast was up from a prior goal of high single-digit growth.

The Times of India reported in October that Beam had started investigations into whistleblower allegations of financial misdemeanors at the India unit. The paper, which cited unnamed people familiar with the matter, said the investigations covered possible violations of the Foreign Corrupt Practices Act.

The investigation in India, prompted by the company's compliance efforts and an internal audit, is already underway, Chief Financial Officer Bob Probst said during a conference call. Some corrective actions have been taken and could impact business there, but were not detailed during the call.

India represents about 3 percent of Beam's total sales and a smaller percentage of operating income, and Beam continues to like the long-term opportunity offered in the country, he said.

Beam said it could not comment on the duration, outcome or financial implications of the matter.