UPDATE 1-Diamond Offshore 1st-qtr profit tops Wall St

* Q1 EPS $2ù09 tops Wall St view of $1.93

* Revenue off 3 pct at $859.7 million

* Special dividend set at $1.375 per share

NEW YORK, April 22 (Reuters) - Diamond Offshore Drilling Inc (DO.N), the second-largest oil and gas rig contractor, posted a higher-than-expected quarterly profit, but trimmed its special quarterly dividend because of weaker market conditions.

First-quarter net profit fell to $290.9 million, or $2.09 per share versus $348.6 million, or $2.51 per share, a year earlier. Revenue slipped 3 percent to $859.7 million.

Analysts had expected the Houston-based company to post a profit of $1.93 per share on revenue of $851.1 million, according to Thomson Reuters I/B/E/S.

The company also announced a special dividend of $1.375 per share, down 50 cents a share from its previous special dividend due to the decline in dayrates for its rigs.

The company said it was also preserving cash for potential rig acquisitions, and it expected to maintain the $1.375 special quarterly dividend through 2010.

On Wednesday, rival Noble Corp (NE.N) reported a 10 percent drop in quarterly profit, topping Wall Street's earnings estimates despite lower-than-expected revenue. [ID:nN21206581] (Reporting by Matt Daily, additional reporting by Braden Reddall in San Francisco; Editing by Maureen Bavdek)