* Q4 EPS C$0.16 vs C$0.21 a year earlier
* Analysts forecast EPS C$0.17
* Revenue falls 9.8 percent to C$395.9 mln (Adds details, analyst comments; updates share price)
TORONTO, May 13 (Reuters) - Flight simulator maker and aviation training company CAE Inc (CAE.TO) (CAE.N) posted a 23 percent drop in quarterly profit on Thursday due to softness in the civil aerospace market.
Profit in its fourth quarter, ended March 31, was C$40.5 million ($39.7 million), or 16 Canadian cents a share, largely in line with expectations. That was down from C$52.7 million, or 21 Canadian cents a share, a year earlier.
Revenue at the Montreal-based company fell 9.8 percent to C$395.9 million.
Analysts, on average, had forecast a profit of 17 Canadian cents a share, according to Thomson Reuters I/B/E/S.
"Investors should not necessarily expect an earnings rebound in upcoming quarters, especially as margins in the simulator manufacturing business will likely remain depressed," said Cameron Doerksen, an analyst at Versant Partners, who has a "buy" rating on the stock with a C$12.50 one year target.
"However, we expect that as the broader aerospace industry continues to recover that CAE's earnings will gradually improve and that the stock will move higher," Doerksen said.
CAE Chief Executive Marc Parent said that considering "the profound downturn in civil aviation" in the past year, the company had managed a strong performance.
"We are emerging gradually from the downturn with a unique global position in civil aviation, continued growth prospects in defense and a solid financial base," Parent said.
Analyst Richard Stoneman from Dundee Securities said in a note to clients that CAE has historically lost money in a commercial aerospace downturn.
"The fact that CAE generated strong, positive earnings in FY2010 is (due to) the improved balance and diversity of the business."
Stoneman has a "buy" rating on CAE with a 12-month target price of C$11.50.
CAE said it sold 20 full-flight simulators in the fiscal year, meeting its target. It said it expects to sell more than 20 in the current fiscal year, given a more positive market environment.
CAE closed the quarter with a backlog of C$3.0 billion in orders, down from C$3.2 billion a year earlier.
It won military contracts worth C$430.5 million in the period.
The company signed agreements in its civil aviation training and services unit worth about C$351.2 million.
CAE shares ended down 16 Canadian cents at C$9.56 on the Toronto Stock Exchange.
$1=$1.02 Canadian Reporting by John McCrank; editing by Peter Galloway