UPDATE 4-Schlumberger & Baker Hughes results point to improving North America

Thu Apr 17, 2014 3:43pm EDT
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* Schlumberger first-quarter profit $1.21/share vs est. $1.20

* Baker Hughes first-quarter adjusted profit $0.84/shr est. $0.78

* Both upbeat on Gulf of Mexico deepwater drilling (Recasts to adds details on outlook risks, new share prices)

By Sayantani Ghosh and Ashutosh Pandey

April 17 (Reuters) - Oilfield services providers Schlumberger Ltd and Baker Hughes Inc each posted better-than-expected quarterly profit on Thursday, though they said pockets of weakness loom in Brazil, Canada, Russia and other drilling regions.

The results highlight a rapidly changing landscape for the oilfield service industry, where companies are competing for a smaller number of new contracts in North American shale fields. At the same time, they are moving into newer, more-lucrative Eastern Hemisphere regions that have higher logistical risks.

Schlumberger and Baker Hughes, which provide drilling technology and equipment, well construction services and seismic surveys for oil and natural gas companies, have for months been complaining of market weakness in North America.

Additionally, Royal Dutch Shell and other large, international oil companies, after a decade of double-digit growth in capital budgets, have begun cutting spending as oil prices stagnate and project costs rise, a bad sign for oilfield service companies.

Executives from Schlumberger, the world's No. 1 oilfield services company by revenue, and Baker Hughes told analysts on conference calls they expect results to slightly improve this year in parts of North America but they warned of potential problems in other regions.   Continued...