UPDATE 1-Patterson-UTI sees dip in pressure pumping margins, revenue

* Q2 EPS $0.60 vs est $0.44

* Q2 rev up 14 pct to $681 mln

* Shares up as much as 9 pct

July 26 (Reuters) - Onshore driller Patterson-UTI Energy Inc expects lower margins and revenue at its pressure pumping division, its second biggest, as excess supply and lower gas drilling take a toll on prices.

Houston-based Patterson-UTI shares, which rose as much as 9 percent after the company announced strong quarterly results on Thursday, fell back to $15.25, up 3 percent, after the forecast.

U.S. oilfield companies have been weighed down by an influx of new pressure pumping equipment, which is used in hydraulic fracturing to extract oil and gas from shale rock.

The surplus is growing as drillers pull out of natural gas basins due to low prices, adding pressure to already depressed prices.

Patterson-UTI expects revenue at its pressure pumping business, which made up nearly a third of second-quarter sales, to fall by about 10 percent sequentially, Chief Executive Douglass Wall said on a conference call with analysts.

Gross margin in the segment is expected to decrease by 300 basis points to 30 percent, he added.

Net profit rose to $92.5 million, or 60 cents per share, for April-June from $81.6 million, or 52 cents per share, a year earlier.

Revenue rose 14 percent to $681 million.

Revenue from contract drilling business rose 19 percent to $460.2 million. Revenue from pressure pumping rose 3 percent to $206.2 million.

Analysts on average had expected the company to earn 44 cents per share on revenue of $663.5 million, according to Thomson Reuters I/B/E/S.