UPDATE 1-Knightsbridge Q3 profit slumps; sees div payout in '10

* Q3 EPS $0.18 vs est $0.31

* Expects to resume dividend payments by 2010

* Shares rise 2 pct

Nov 12 (Reuters) - Crude oil transporter Knightsbridge Tankers Ltd (VLCCF.O) posted a 73 percent fall in quarterly earnings, missing market expectations, on weak charter hire rates and higher operating expenses.

However, the company said it expects to resume dividend payments in 2010.

Knightsbridge said it took delivery of two capesize vessels in August and October each and both have been fixed on time charters, helping it build its cash reserves.

The company had halted dividend payments in the last two quarters mainly because of large amount of equity paid on its capesize vessels, it said in a statement.

Net income for the latest third quarter fell to $3.1 million, or 18 cents a share, compared with $11.3 million, or 66 cents a share, a year ago.

Analysts on an average had expected earnings of 31 cents a share, according to Thomson Reuters I/B/E/S.

Shares of the company were up 2 percent at $12.94 in morning trade Thursday on Nasdaq. (Reporting by Swati Pandey in Bangalore; Editing by Gopakumar Warrier)