UPDATE 3-Joy Global sells LeTourneau's drilling unit; shares up

* To sell drilling products business for $375 mln

* Q3 EPS from cont. ops $1.61 vs est $1.53

* Q3 rev up 34 pct at $1.1 bln

* Raises 2011 outlook

* Shares rise 7 pct to near one-month high (Adds analysts comments, share movement)

By Bijoy Anandoth Koyitty

BANGALORE, Aug 31 (Reuters) - Joy Global Inc said it agreed to sell the drilling products business of recently acquired LeTourneau Technologies to Cameron International Corp for $375 million as it plans to focus on its core mining equipment business.

The deal relieves any concerns that the drilling business would cause Joy Global to lose its focus on mining operations at a time when Caterpillar Inc , which bought Bucyrus, is building its dominance in the $40 billion mining gear market.

Joy Global said the LeTourneau unit sale will help it to complete its acquisition of China-based International Mining Machinery Holdings Ltd .

U.S.-based Joy Global, which has purchased 18 percent of IMM shares on the open market so far, has plans to buy an initial 41 percent stake in the company for $585 million to expand in China's fast-growing coal market.

UBS machinery analyst Henry Kirn said investors would like Joy Global's LeTourneau drilling unit deal.

Shares of Joy Global, which shed 13 percent of their value since its IMM deal announcement in mid-July, touched a near one-month high of $88.45 in Wednesday morning trade on Nasdaq.

The divestiture of the LeTourneau drilling business represents Joy Global's 2010 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) multiple of 11.6 times, above the multiple of 10 times it paid for LeTourneau in total, Kirn wrote on a note to clients.

Joy Global acquired LeTourneau International from Rowan Co for $1.1 billion in May.

BOOKING GROWTH

Joy global on Wednesday posted market-beating third-quarter earnings, while raising its 2011 outlook on strong bookings.

Joy Global said its total bookings for the quarter ended July 29 rose 49 percent to $1.4 billion. Surface mining equipment bookings almost doubled to $732.1 million.

For 2011, Joy Global now expects earnings of $5.70-$6.00 a share, on revenue of $4.3-$4.5 billion, up from its prior outlook of earnings of $5.30-$5.60 a share on revenue of $4.1-$4.3 billion.

The outlook is driven by continued improvement in operational efficiencies, investments in LeTourneau and IMM and commodity and energy fundamentals that remain intact, JPMorgan analyst Ann Duignan wrote in a note to clients.

"Capex increases in 2010 and 2011 have returned customer capital expenditures to 2008 levels, and further increases are expected in 2012," the company said in a statement.

Joy Global said it sees a "real" possibility of some slowing of demand growth going forward, but do not expect the macro concerns to lead to a major market correction. (Reporting by Bijoy Koyitty in Bangalore; Editing by Maju Samuel) (bijoy.koyitty@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800; Reuters Messaging: bijoy.koyitty.reuters.com@reuters.net))