UPDATE 1-Energy Conversion Devices quarterly profit falls 81 pct

* Q3 shr $0.03 vs $0.17 last year

* Q3 rev down 6 percent at $66 mln

* Q3 solar gross margins 29.2 pct

May 11 (Reuters) - U.S. solar company Energy Conversion Devices Inc (ENER.O) on Monday reported a 81 percent drop in third-quarter profit due to weak demand for solar power in the United States.

"The global market continues to be difficult, with the biggest challenge being the sufficiency of project financing and our customers' continued access to capital," Chief Executive Mark Morelli said in a statement.

Skyrocketing demand for solar power was a bright spot in the global economy last year until a pullback in solar subsidies in Spain and frozen credit markets dried up access to project financing and choked off demand.

Net income for the fiscal third quarter was $1.3 million, or 3 cents per share, compared with $7 million, or 17 cents per share, a year ago.

Results for the latest quarter include preproduction costs of 3 cents a share and restructuring costs of less than a cent a share, the company said.

Wall Street analysts, on average, had been expecting earnings of a penny per share, before items, according to Reuters Estimates.

Revenue fell 6 percent to $66 million. Analysts were expecting revenue of $68.6 million, according to Reuters Estimates.

The drop in earnings follows a string of dour announcements by the company in the past two months.

In March, ECD slashed its revenue view for the quarter, saying it was expected to be about flat with the $70 million it brought in last year. It also said it would remain profitable for the quarter.

The company at the time also withdrew its forecast for 2009 and said it would slow expansion plans.

ECD makes lightweight, flexible solar laminates for rooftops and buildings. The so-called thin film solar products are made from amorphous silicon and, unlike traditional solar panels, do not rely on costly crystalline silicon as their primary raw material.

Last week, Rochester Hills, Michigan-based ECD said it had begun a temporary production furlough to bring supplies in line with weak demand and save $6 million in the June quarter.

Shares of the company closed at $17.01 Friday on Nasdaq. The stock is so far down as much as 80 percent since its June 2008 year-high of $83.33, mirroring other stocks in the space which have also been in freefall. (Reporting by Adveith Nair in Bangalore, Editing by Dinesh Nair)