UPDATE 1-Expeditors Q3 profit drops, shares fall

* Q3 EPS $0.27 vs $0.33 yr-ago

* Q3 revenue falls 33 pct

* Shares fall 5 pct in early trade

Nov 3 (Reuters) - Expeditors International of Washington Inc's (EXPD.O) quarterly profit sank 33 percent as weak freight demand coupled with a tough pricing environment took a toll on the logistics service provider.

"There certainly were significant challenges during the latter part of this quarter as both air and ocean carriers imposed capacity reductions in order to implement very aggressive price increases," Chief Executive Peter Rose said in a statement.

On the positive side, year-over-year declines in freight volumes for September were at the lowest levels for the year, he said.

For the third quarter, the Seattle-based company earned $57.8 million, or 27 cents a share, compared with $85.6 million, or 39 cents a share, a year ago.

Revenue fell 33 percent to $1.04 billion.

Analysts on average had expected earnings of 29 cents per share, on revenue of $1.02 billion, according to Thomson Reuters I/B/E/S.

Airfreight tonnage was down 6 percent while ocean freight container counts were down 17 percent during the quarter.

Shares of the company were down 4 percent at $32.18 in morning trade Tuesday on Nasdaq. They touched a low of $31.69 in early trade. (Reporting by A.Ananthalakshmi in Bangalore; Editing by Gopakumar Warrier)