UPDATE 3-MGM Mirage profit falls 30 pct as economy slides

(Adds company comments, analyst comment, updates stock price)

By Deena Beasley

LOS ANGELES, May 6 (Reuters) - MGM Mirage Inc (MGM.N: Quote, Profile, Research), the world's second-largest casino operator, said on Tuesday quarterly profit fell 30 percent as a slower U.S. economy hit spending in Las Vegas.

But the company's recently battered shares were up more than 5 percent in midday trading after MGM said it is continuing to pursue ways to enhance revenue and reduce costs.

MGM is the fourth large gaming company to report deteriorating quarterly earnings, following Las Vegas Sands Corp (LVS.N: Quote, Profile, Research), Wynn Resorts Ltd (WYNN.O: Quote, Profile, Research) and Boyd Gaming Corp (BYD.N: Quote, Profile, Research) last week. On Monday, privately held and highly leveraged casino operator Tropicana Entertainment LLC filed for bankruptcy protection.

MGM, which operates the Bellagio, Mandalay Bay and Circus Circus resorts in Las Vegas, said first-quarter net income fell to $118.3 million, or 40 cents per share, from $168.2 million, or 57 cents per share, a year ago.

That missed Wall Street's average forecast of 44 cents per share, according to Reuters Estimates.

"While the quarter wasn't pretty, it wasn't disastrous versus lowered expectations. We expect the stock to trade up this morning on relief," said Morgan Stanley analyst Celeste Mellet Brown in a research note.

Chief Operating Officer Jim Murren said MGM has been able to pull a number of costs out of its expense structure, including energy products, consulting, travel and advertising, as well as previously-detailed payroll cuts.