UPDATE 3-Heidrick & Struggles Q1 profit drops; shares sink

(Adds details, analyst's comments, updates share movement)

April 29 (Reuters) - Executive search firm Heidrick & Struggles International (HSII.O: Quote, Profile, Research) trailed market estimates with a 30 percent drop in quarterly profit, hurt by higher expenses and a weakness in its American financial services business, sending its shares down 15 percent.

Heidrick & Struggles, which specializes in finding chief executives, board members and senior-level management, said weakness in consumer finance and capital markets and investment banking sub sectors hit its financial services business in the first quarter.

The financial unit, which accounted for a third of the total revenue in 2007, has been hit by the uncertainty in U.S. credit markets.

The credit crisis has seen many heads rolling in financial firms, including Citigroup and Merrill Lynch.

"As unemployment rises throughout 2008, we believe companies will cancel orders for new searches with HSII, leading to earnings disappointment," Goldman Sachs analyst David Feinberg said in a note to clients.

The change in U.S. non-farm payroll has been negative for the past three months, indicating the deterioration in the labor market, Feinberg added.

"We expect the trend to continue to be negative."

Feinberg does not expect investors to give credibility to the company's reiteration of 2008 outlook due to lack of visibility in its permanent placement business model and the earnings miss.