UPDATE 1-Top Ships' Q3 results slump

* Q3 EPS $0.01 vs $1.44 yr ago

* Q3 revenue down 65 pct

* Breaches loan covenants

Nov 9 (Reuters) - Top Ships Inc's (TOPS.O) third-quarter earnings slumped 99 percent, hurt by a fall in sales, and the crude oil transporter, which has George Economou, CEO of DryShips Inc (DRYS.O), as its single largest shareholder, said it was in breach of loan covenants.

"As of Sept. 30, 2009, we were in breach of our loan covenants and we are currently in discussions with all our banks to receive waivers for these breaches and extend existing waivers that were scheduled to expire in 2010, to 2011," Chief Executive Evangelos Pistiolis said in a statement.

Top Ships posted net earnings of $329,000, or 1 cent a share, down from $41.6 million, or $1.44 a share, in the year-ago quarter.

Excluding items, the company posted earnings of a 6 cents a share.

Revenue was down 65 percent at $25.2 million.

Top Ships' shares closed at $1.05 Monday on Nasdaq. (Reporting by Arundhati Ramanathan in Bangalore; Editing by Maju Samuel)