UPDATE 2-Tennant posts narrower-than-expected Q1 loss

* Q1 adj loss/shr $0.04 vs est of $0.13 loss/shr

* Revenue falls 24 pct

* Expects to be in compliance with debt covenants in 2009

* Shares rise as much as 7 pct (Recasts; adds details, analyst comment, updates share movement)

By Bhaswati Mukhopadhyay

BANGALORE, May 7 (Reuters) - Tennant Co (TNC.N: Quote, Profile, Research), which makes floor cleaning products, reported narrower-than-expected quarterly loss, helped mainly by cost cuts, but lowered its 2009 revenue outlook.

Shares of the company rose as much as 7 percent to $17.39, but later shed some gains to trade up 34 cents at $16.62 Thursday afternoon on the New York Stock Exchange.

The stock is gaining on the slimmer-than-expected loss and also because the company seems to be managing costs well, analyst Joe Maxa of Dougherty & Co said. Tennant said it obtained an amendment to its credit agreement to exclude non-cash charges and previously announced restructuring charges from debt covenant calculations.

It expects the amendment to help it remain in compliance with its covenants throughout 2009.