Shares of Shuffle Master fell $1.81, or 11.8 percent, to $13.50 in morning trading, after earlier trading as low as $13.15. The stock has traded in a 52-week range of $13.54 to $32.82.

Late Monday, Shuffle Master reported a quarterly profit of $2.7 million, or 8 cents per share, compared with $7.3 million, or 20 cents per share, in the year-ago quarter.

Analysts expected net income of 13 cents per share, according to a Thomson Financial poll.

Jefferies & Co. analyst Andrew Didora reduced his price target on Shuffle Master to $15 from a range of $18 to $20, partly due to concern over a shift to leasing shufflers versus selling them.

"While this is a longer term benefit to Shuffle Master, it will likely take several quarters to play out and will hurt profit growth in the near term," he wrote in a note to clients.

Didora cut his 2007 earnings estimate to 30 cents per share from 50 cents per share, and trimmed his 2008 prediction to 60 cents per share from 73 cents per share.

Joseph Greff of Bear Stearns took a more optimistic view, saying the earnings miss may have been due to management purposefully focusing on leased business.

"We think, longer-term, this strategy makes sense given the recurring nature of leased revenue," he said in a note.

However, Greff recognized that the detrimental near-term impact will probably frustrate investors who want more immediate progress.

He reduced his fourth-quarter earnings estimate 9 cents per share from 13 cents per share, and cut his 2007 forecast to 31 cents per share from 40 cents per share. Greff lowered his 2008 estimate to 59 cents per share from 63 cents per share.

Elsewhere, Roth Capital Partners LLC analyst Todd Eilers lowered his price target by $3 to $15.