UPDATE 2-Convergys profit tops Wall Street; cuts full-year view

(Recasts, adds comments from CEO, analyst)

By Bijoy Anandoth Koyitty

BANGALORE, July 23 (Reuters) - Call center operator Convergys (CVG.N) posted higher second-quarter profit but trimmed its full-year earnings outlook as it sees a slowdown in call volumes hurting its business, sending its shares down more than 8 percent to a new year-low.

The outlook cut came as a surprise to the market. However, an analyst said the business did deteriorate in June, which Convergys and its peers did not anticipate.

The company had in the previous quarter claimed that a slowing U.S. economy means more business to them as it would accelerate the rate of outsourcing.

However, the reverse happened because clients often cut back on spending or at least take several quarters to evaluate their outsourcing plans in a tough economic situation, Kaufman Bros Equity Research analyst Karl Keirstead said by phone.

"In general, outsourcing companies always say that a slowing economy will boost demand, although it never happens so easily, as we can see with the pressures on India-based outsourcing companies such as Infosys," Keirstead said.

Keirstead rates Convergys stock at "hold."

Convergys said it expects to earn $1.15 to $1.20 per share for 2008, compared with its prior view of $1.31 to $1.36.