* Raises FY forecast for second time in 2014
* Second-quarter core EPS $2.90 cents vs est $2.73
* Revenue at LoyaltyOne up 62 pct
* Shares up 3 pct (Updates share movement, background)
July 17 (Reuters) - Credit card processor Alliance Data Systems Corp bumped up its full-year earnings forecast for the second time this year after posting a better-than-expected quarterly profit, helped by strong sales in its customer loyalty programs business.
Sales at the unit, LoyaltyOne, jumped 62 percent to $355.6 million in the second quarter, accounting for about 28 percent of the total revenue.
Alliance Data's shares were up 1 percent at $278.09 midday on the New York Stock Exchange.
LoyaltyOne owns and operates the Air Miles Reward Program, one of the top loyalty programs in Canada.
The company's private-label credit cards business also performed well during the quarter.
Revenue from the business, which provides services to retailers such as Ann Taylor and Buckle Inc, rose 16 percent to $557.3 million.
The company's online marketing unit, which has partnerships with Twitter Inc and Facebook Inc, reported an 8 percent increase in revenue to $357.1 million.
Facebook entered into a partnership with Epsilon, Alliance Data's online marketing unit, last year to help advertisers better target customers through loyalty programs.
The unit followed that up with a similar deal with Twitter this January.
The company raised its full-year revenue forecast to $5.30 billion from $5.25 billion and core earnings forecast to $12.35 Per share from $12.25.
Analysts were expecting earnings of $12.35 per share on revenue of $5.27 billion, according to Thomson Reuters I/B/E/S.
The company's net income attributable to shareholders rose to $137.4 million, or $2.19 per share.
The company reported core earnings of $2.90 per share, topping the average analyst estimate of $2.73 per share.
Total revenue rose 23 percent to $1.27 billion, edging past analyst's average estimate of $1.25 billion.
Total operating expenses rose 29 percent to $982.7 million for the quarter.
Alliance Data's shares have risen about 5 percent this year. Shares of the Dallas-based company closed at $275.17 on Wednesday on the New York Stock Exchange.
(Reporting By Neha Dimri in Bangalore; Editing by Saumyadeb Chakrabarty)