UPDATE 1-Sonic Automotive profit down 59 percent

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DETROIT, July 29 (Reuters) - Auto dealership chain Sonic Automotive Inc (SAH.N) posted a 59 percent decline in quarterly earnings on Tuesday, hurt by an industrywide slowdown in U.S. new vehicle sales.

The No. 3 U.S. auto retailer said net income fell to $10.9 million, or 27 cents a share, from $26.4 million, or 57 cents a share, a year earlier.

The company reported a profit of 49 cents share from continuing operations.

Revenue fell 1.7 percent to $ 1.98 billion.

Analysts' average forecast was for earnings of 47 cents per share on revenue of $1.98 billion, according to Reuters Estimates.

Same-store sales fell 7.8 percent, hurt by an 11.7 percent decrease in new-vehicle revenue.

The company's parts and service revenue fell 0.8 percent, while finance and insurance revenue fell 2.1 percent. Used vehicle revenue rose 2.7 percent.

Automakers and dealers have seen U.S. light vehicle sales drop for a third consecutive year amid a weak economy and a shift in consumer demand toward smaller vehicles and away from pickup trucks and SUVs due to soaring gas prices.

Earlier this month, Sonic warned that full-year earnings would be lower than expected due to the weak U.S. auto market. It cut its forecast for earnings from continuing operations to a range of $1.65 to $1.85 per share, down from $2.35 to $2.50. (Reporting by Poornima Gupta, editing by Maureen Bavdek and John Wallace)