UPDATE 1-Applied Industrial posts weak Q3 results; shares fall

(Recasts; adds details, share movement)

April 24 (Reuters) - Applied Industrial Technologies Inc (AIT.N) posted third-quarter earnings in line with market estimates and lower-than-expected revenue, hurt by the slump in housing and automotive markets, sending its shares down 15 percent.

The distributor of bearings, power transmission components and industrial rubber products also said it expects 2008 sales at the lower end of its prior forecast range of $2.10 billion to $2.18 billion.

The company reported net income of $23.6 million, or 55 cents a share, for the third quarter, compared with $21.7 million, or 49 cents a share, a year earlier. Sales rose to $530.2 million from $521.1 million, but missed Wall Street's forecast of $546.1 million. The company said it does not see significant economic improvement in the fourth quarter.

But Applied Industrial raised the lower end of its 2008 earnings forecast. It expects 2008 earnings of $2.15 to $2.25 a share, compared with its prior view of $2.10 to $2.25 a share.

Analysts were expecting earnings of $2.21 a share, before items, on revenue of $2.12 billion.

Shares of the Cleveland, Ohio-based company fell to a low of $26.93, before recovering some of the losses to trade down $3.89 at $28.08 Thursday afternoon on the New York Stock Exchange. (Reporting by Bhaswati Mukhopadhyay in Bangalore; Editing by Pratish Narayanan)