UPDATE 3-Alexander & Baldwin Q3 net profit falls, shares tank

* Q3 cont ops EPS $0.48; Q3 EPS $0.89

* Reuters Estimates Q3 EPS view $0.77

* Q3 revenue $458.6 mln vs estimate of $489.3 mln

* Warns of softening in its real estate business

* Shares fall 21 pct to 5-yr low (Adds analyst comments, updates share movement)

Oct 24 (Reuters) - Alexander & Baldwin Inc AXB.N, which provides ocean transportation services, reported a 25 percent drop in quarterly net income, hurt by weakness across its segments, and its shares fell 21 percent to a five-year low.

In a conference call with analysts, the company, which also provides services in real estate, warned of a softening in this business, particularly on the residential side.

"We would be more than surprised if there was any turnaround, particularly in the early part of the year (2009)," the company said on the call.

The company also said it expects continuing volume issues at its units, Matson Integrated Logistics and Matson Navigation, through which it provides ocean transportation and logistics services.

Shares of the Honolulu, Hawaii-based company fell to a low of $25.32 but pared some losses and were down 12 percent at $28.28 in midday trade on the New York Stock Exchange.

S&P Equity Research analyst Stewart Scharf said he expects economic conditions to worsen in Hawaii and globally into 2009.

"We see narrower margins as retail and office occupancy rates decline, residential property sales slow and shipping weakens," he wrote in a note to clients.

Scharf cut his 2008 and 2009 estimates by 55 cents each to $2.50 for 2008 and $2.35 for 2009. He maintained a "strong sell" rating on the stock and also cut his price target by $9 to $22.

Q3 RESULTS

Net income fell to $36.8 million during the third quarter. Revenue, however, rose about 6 percent. [ID:nWNAB1455]

Total container volume decreased 5 percent from last year, mostly due to slowing market conditions in Hawaii.

Year-over-year volume declined 8 percent and 11 percent in the highway and rail segments, respectively.

The company said operating loss in its agribusiness segment doubled to $6.7 million.

Operating profit in its real-estate leasing segment dropped 9 percent, hurt by modest occupancy losses in a few retail and office properties due to softening economic market conditions. (Reporting by Adveith Nair in Bangalore; Editing by Himani Sarkar and Deepak Kannan)