UPDATE 1-Shuffle Master posts surprise Q1 loss; shares fall

(Recasts, adds details, share movement)

March 17 (Reuters) - Casino game maker Shuffle Master Inc (SHFL.O) posted a surprise quarterly loss hurt by higher expenses, sending its shares down 5 percent.

The maker of game technology, such as card shufflers used by casinos, posted a first-quarter net loss of $1.8 million, or 5 cents a share, compared with a profit of $2.0 million, or 6 cents a share, in the year-ago period.

Revenue rose 1 percent to $37.9 million.

Operating expenses increased 20 percent to $39 million. The latest quarter included corporate executive employee severance and legal costs of 4 cents a share.

Analysts on average were expecting earnings of 7 cents a share, before special items, on revenue of $44 million, according to Reuters Estimates.

The company said it still expects 2008 revenue to be higher compared with 2007. It had posted revenue of $178.9 million for fiscal 2007.

Shuffle Master said it expects to return to profitability in the second quarter and remain profitable throughout fiscal 2008.

The company also expects adjusted earnings per share for the year to improve over fiscal 2007.

Shares of the Las Vegas company were trading at $6.84 after the bell. They had closed down more than 2 percent at $7.20 Monday on Nasdaq. (Reporting by Sreerupa Mitra in Bangalore; Editing by Deepak Kannan)