UPDATE 1-Neo Material Q2 profit drops 44 percent

* Q2 EPS $0.04 vs $0.07 yr ago

* Revenue slumps 50 pct

Aug 11 (Reuters) - Canada's Neo Material Technologies Inc (NEM.TO), a maker of magnetic material and magnets, posted a 44 percent drop in second-quarter profit as revenue halved.

"We expect sales volumes to return to more normal business patterns, resulting in increased sales and earnings for the remainder of 2009," Chief Executive Constantine Karayannopoulos said in a statement.

Second-quarter net income was $4.4 million, or 4 cents a share, compared with $7.9 million, or 7 cents a share, a year earlier.

The company, which produces rare earth metals such as neodymium, praseodymium, dysprosium and terbium and rare earth magnetic powders, said revenue fell 50 percent to $41.8 million.

Shares of the company closed at C$2.82 Tuesday on the Toronto Stock Exchange. (Reporting by Amit Kumar in Bangalore; Editing by Deepak Kannan)