* Sees 4th-qtr N America operating margin of 8.5-9.5 pct
* Says revenue to be lower than its expectations
* Susquehanna, Global Hunter cut price targets on stock
* Shares rise as much as 4 pct
Dec 18 (Reuters) - Baker Hughes Inc, the world's third-largest oilfield services company, said current-quarter margins and revenue would be below its expectations, but the weak outlook was largely expected and the company's shares rose as much as 4 percent.
Baker Hughes cited decreased land drilling activity and price erosion in the pressure pumping business for the weak forecast.
"I didn't find there to be much in the way of anything (that) I didn't expect in the BHI preannouncement. Perhaps, it wasn't as bad as some expected," Phil Weiss, senior analyst at Argus Research, told Reuters.
The number of rigs drilling in the United States for natural gas fell for the third straight time in the week ended Dec. 14 as producers scaled back drilling on weak gas prices. Oil and gas companies's drilling budgets for the year are also almost exhausted.
Barclays analysts said data on reduced North American land drilling activity are "buying opportunities as we believe the rig count will rebuild in 2013 as fresh capital budgets are put to work."
Houston-based Baker Hughes said it expects its operating profit margin in North America to be between 8.5 percent and 9.5 percent for October-December, down from 11.7 percent in the third quarter.
The company did not provide its prior expectations for fourth-quarter margins.
Analysts on average were expecting revenue of $5.28 billion, according to Thomson Reuters I/B/E/S, lower than the $5.39 billion the company reported last year.
Analysts at Tudor, Pickering, Holt & Co cut their fourth-quarter earnings estimate to 62 cents from 74 cents per share.
Baker Hughes said operating margin from international operations will be in line with the 12 percent in the third quarter, despite weaker-than-anticipated rig counts in Brazil and Colombia, and delays in the North Sea and Iraq.
The company's rig count in international markets fell 17 percent in the third quarter from the second.
Baker Hughes' weak forecast comes days after Schlumberger Ltd, the largest oilfield services company, said its fourth-quarter earnings would be hurt by weaker-than-expected drilling in North America.
Margins have been squeezed in pressure pumping equipment -- used to extract oil and gas from shale rock formations -- as new equipment has flooded the U.S. market.
Demand for pumping also appears to be declining faster than rig count, suggesting that E&P companies are drilling but not fracture stimulating an increasing number of wells.
"However, drilling and pumping activity must equilibrate over time and thus there will be a pumping catch up period," Bernstein Research analyst Scott Gruber wrote in a client note.
"We believe this occurs early next year, with pumping demand rebounding faster and to a greater degree than rig count."
At least two brokerages cut their price targets on Baker Hughes's stock. Susquehanna cut its price target to $42 from $47, while Global Hunter Securities cut it to $40 from $43.