UPDATE 3-Straumann shares tumble on outlook cut

* 9-mth sales 589.2 million Swiss francs vs 602 million fcst

* Lowers full-year forecast

* Cuts net profit margin forecast

* Shares fall up to 19 percent

(Adds share price, CEO comments)

By Sven Egenter

ZURICH, Oct 30 (Reuters) - Swiss dental implant maker Straumann's shares dropped 19 percent after the group missed forecasts for third-quarter sales and cut its full-year outlook as customers put off fixing their teeth due to the economic downturn.

Straumann shares lost as much as 19 percent to hit its lowest level in 4-1/2 years at 186.10 francs, underperforming a rise in the Swiss mid-cap index as well as a 1.5 percent fall in the European healthcare index.

The world's second largest maker of dental implants said on Thursday net revenue should grow around 15-17 percent in local currencies for the full year. Previously the group had predicted growth in the low to mid 20s range.

Sales rose 13.6 percent to 589.2 million francs ($512.3 million) in the first nine months, an 18 percent rise when adjusted for currency effects, helped by the reintroduction of its previously banned Biora products in the United States, the group said.

Analysts had on average expected the group to post a 16 percent rise in nine-month sales to 602 million francs, according to a Reuters poll. Third-quarter sales rose 5.6 percent to 176.4 million francs.

"Straumann is still growing much faster than its key competitors," ZKB analyst Sibylle Bischofberger said.

"But the market has expected more and they cut the outlook, so it is disappointing," she said. "Bad news is punished in this environment."

Straumann also cut its forecast for net profit margin to 20 percent from a previously expected 22 percent.

Customers shied away from dental treatments that were not absolutely necessary due to the economic downturn and pricing pressures were rising, the group said in a presentation.

WINNER

Straumann Chief Executive Gilbert Achermann told Reuters the group was still likely to emerge as the winner from the crisis.

"We are growing faster than the market," Achermann said. "We have reduced the gap to the market leader (Nobel Biocare) in terms of market share."

But the market for dental implants was only growing by six to nine percent, Achermann said. Before, he had estimated market growth of up to 15 percent.

The world's largest producer of dental implants, Nobel Biocare, shocked investors with a fresh profit warning earlier this month, saying consumers cut back on expensive dental treatments in North America and some parts of Europe.

Straumann shares have underperformed the European healthcare index with a 26 percent loss this year.

But Nobel Biocare's shares have dropped 68 percent, trading at a 40 percent discount to Straumann's valuation of around 17 times forecast 2009 earnings. ($1=1.150 Swiss francs)

(additional reporting by Oliver Hirt)

(Editing by Greg Mahlich and David Cowell)