UPDATE 3-Boyd Gaming quarterly profit falls 73 pct

* Net income 10 cents vs 36 cents year earlier

* Revenue fell 13 percent to $426.5 million

* Echelon project remains on hold through at least 2009

* Shares up over 4 per cent (Adds company and analyst comments, byline, updates share price)

By Deena Beasley

LOS ANGELES, Oct 28 (Reuters) - Casino operator Boyd Gaming Corp (BYD.N), posted a weaker-than-expected 73 percent drop in quarterly profit on Tuesday as the U.S. economic slowdown reduced gambling revenue.

But Boyd also said its partially built Las Vegas Strip project would remain on hold through at least 2009, sending its shares up over 4 percent in afternoon trading.

The move "reduces the potential stress on their balance sheet going forward," said Susquehanna Financial analyst Robert LaFleur.

Boyd said in August it expected to mothball the $4.8 billion Echelon project for at least nine months because of an inability to secure financing for joint venture segments of the site.

"Given what has happened in the market since we announced the suspension of our Echelon project on August 1, it is unlikely we will resume construction in 2009," Chief Executive Keith Smith said on a conference call with analysts and investors.

He emphasized that Boyd remains "committed to having a meaningful presence on the Las Vegas Strip," and is now looking at alternatives including opening the project in phases, modifying its scope or entering into other partnerships.

Boyd said it has so far spent $525 million on Echelon and expects to spend and additional $150 million over the next couple of quarters, mainly to cover steel fabrication costs.

Echelon, comprised of several hotels and entertainment venues located on the site of the now-demolished Stardust resort, had originally been slated to open in 2010.

Boyd's third-quarter net income fell to $8.7 million, or 10 cents a share, from $31.9 million, or 36 cents per share, a year earlier.

"Boyd's operating results were weak across the board, but were impacted by hurricanes (four of Boyd's six regional casinos are in Louisiana/Mississippi) and a worsening gaming market in September," Morgan Stanley analyst Celeste Mellet Brown said in a research note.

Excluding items, earnings from continuing operations were 16 cents a share. Revenue fell 13 percent to $426.5 million.