UPDATE 2-Life Time Fitness sees muted member growth; shares fall

* Q3 EPS $0.51 vs est $0.48

* Raises FY EPS view to $1.78-$1.81

* Says membership growth to remain challenging

* Shares fall as much as 18 pct (Recasts; adds conference call details, analyst comment, updates share movement)

By Abhishek Takle

BANGALORE, Oct 22 (Reuters) - Life Time Fitness Inc's (LTM.N: Quote, Profile, Research) quarterly profit topped analysts' estimates helped by lower taxes and interest expenses, but its shares fell 18 percent as the company cautioned that signing up new members will remain challenging for the foreseeable future.

New memberships grew 6 percent in the third quarter compared with a 13.2 percent jump seen in the year-ago period. The attrition rate was 10.6 percent.

"I think people are concerned with the level of new membership growth and the level of attrition, both were disappointing and perhaps puts extra pressure on the model going forward," Stifel Nicolaus & Co analyst Thomas Shaw said by phone.

On a conference call with analysts, Chief Executive Bahram Akradi said the business environment had stayed tough and the company was still facing challenges.