UPDATE 1-Finning earnings down 66 percent as sales fall

* Q3 EPS C$0.13 vs C$0.37

* Analysts had expected earnings of C$0.24/shr

* Revenue down 27 percent

TORONTO, Nov 10 (Reuters) - Finning International Inc (FTT.TO), the world's largest Caterpillar equipment dealer, said on Tuesday its quarterly profit fell 66 percent due to softer than expected sales in Canada and Britain.

The company, which sells and rents heavy industrial equipment and engines, said its third-quarter net income was C$22 million ($21 million), or 13 Canadian cents a share. That compares with C$65 million, or 37 Canadian cents a share, a year earlier.

Revenue was down 27 percent at C$1.07 billion due to lower new and used equipment sales and rental revenues in Canada and Britain.

Analysts, on average, had expected a profit of 24 Canadian cents a share, on revenue of C$1.14 billion according to Thomson Reuters I/B/E/S.

"It was a tough quarter," Mike Waites, president and chief executive of Finning, said in a statement. "Challenging economic conditions affected our business more severely than we had expected."

Waites said Finning had generally held its market share and in some cases increased it, and that its South American operations delivered strong results. However, he said revenue declined at the company's Canadian operations and that its United Kingdom group experienced difficult markets.