UPDATE 1-Baker Hughes Q3 profit falls

* Q3 EPS $0.18 vs $1.39

* Q3 Revenue falls 26 pct to $2.23 bln

Nov 4 (Reuters) - U.S. oilfield services company Baker Hughes Inc (BHI.N) posted an 87 percent slide in third-quarter profit on Wednesday as the oil and gas drilling industry recovers slowly from the past year's wrenching slump.

Net profit fell to $55 million, or 18 cents per share, from $429 million, or $1.39 per share, a year ago. Revenue fell 26 percent to $2.23 billion.

Larger rivals Schlumberger Ltd (SLB.N) and Halliburton Co (HAL.N) reported sharp drops in quarterly profit and signaled expectations of a lukewarm 2010 recovery, and further struggles for those chasing North American natural gas. [ID:nN2248654]

Baker Hughes, which is buying BJ Services Co (BJS.N) to better compete with Schlumberger and Halliburton in pressure pumping, said in September it expects only modest growth in the number of rigs drilling in North America through 2011.

Shares of Baker Hughes have gained 35 percent this year, compared with a 60 percent increase for the Philadelphia Stock Exchange oil service index .OSX. (Reporting by Ajay Kamalakaran in Bangalore and Braden Reddall in San Francisco; Editing by Vinu Pilakkott)