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FRANKFURT, Oct 14 (Reuters) - Software AG :
* Reports 25 percent drop in third-quarter earnings before interest and tax (EBIT) to 50.1 million euros ($56.1 million).
* Earnings weighed down by a 27 percent slump in revenue at its traditional database business as well as 5.4 million euros of provisions for a legal dispute in the United States.
* Q3 revenue down 8 percent at 198.3 million euros.
* On an adjusted basis, its margin on earnings before interest, tax and amortisation (EBITA) improves to 33.7 percent from 32.5 percent
* Affirms guidance for a 2016 margin on adjusted EBITA between 30.5 percent and 31.5 percent.
* Still sees revenue from its digital business growing by currency-adjusted 5-10 percent this year and revenue from database unit Adabas & Natural down 2-6 percent.
* Shares fall 6 percent in pre-market trade at brokerage Lang & Schwarz.($1 = 0.8928 euros) (Reporting by Maria Sheahan; Editing by David Goodman)