* Q4 EPS C$0.20 vs est C$0.29
* Q4 rev C$424.9 mln vs est C$401.6 mln
* "Modest organic growth" view for 2010 billings disappoints
* Shares dip as much as 10 percent (Recasts, adds analyst comments, updates shares)
By Abhiram Nandakumar
BANGALORE, March 4 (Reuters) - Canada's Groupe Aeroplan AER.TO, which operates Air Canada's ACa.TO frequent flier program, posted a lower-than-expected quarterly profit, hurt by disappointing billings and refrained from issuing a specific billings outlook for the year, sending its shares down as much as 10 percent.
The company said it expects modest organic growth in gross billings in its legacy businesses and as well as in its consolidated adjusted EBITDA (earnings before interest, taxes, depreciation and amortization).
"Unfortunately the definition of modest leaves itself open to a negative interpretation versus a given a range on the organic growth, Kenric Tyghe of Raymond James told Reuters by phone.
"Given the surprise in the quarter, one would hope that they were in a position to provide something more definitive than 'modest organic growth'."
For the first quarter, Tyghe expects a continued improvement in the state of the Canadian consumer and in the spend per credit card of the core Canadian consumer, but was cautious on the outlook for the United Kingdom, given the state of the economy there.
The company also forecast lower free cash flow levels this year blaming certain non-recurring items and the investments made in 2009.
Net income for the quarter ended Dec. 31 was C$20.5 million ($19.88 million), or 10 Canadian cents per share compared with C$86.9 million of 44 Canadian cents per share, a year ago.
Adjusted earnings were 20 Canadian cents a share, while analysts were expecting earnings of 29 Canadian cents per share, according to Thomson Reuters I/B/E/S.
Gross billings fell 0.4 percent to C$363.0 million in the quarter, falling short of BMO Securities estimates by C$2.7 million. Gross margin fell 17 percent, while costs rose 17 percent.
"Although gross billings came in close to expectations, the results are disappointing due to a much lower margin than expected," BMO's Claude Proulx said in a note.
Proulx cut his rating on the company's stock to "market perform" from "outperform", and reduced its price target to C$11.00 from C$12.50.
Shares of the Montreal, Quebec-based company were trading down about 7.5 percent at C$11.00 in afternoon trade on the Toronto Stock Exchange. They had touched a low of C$10.68 earlier in the session. ($1=1.031 Canadian Dollar) (Reporting by Abhiram Nandakumar in Bangalore; Editing by Savio D'Souza)