* Schlumberger Q2 EPS $1.15 vs estimate $1.10 * Baker Hughes profit down 45 pct, CEO sees rebound * Schlumberger shares rise 4 pct, Baker down 4 pct By Braden Reddall July 19 A three-decade high for drilling activity outside North America lifted Schlumberger Ltd to a seventh straight estimate-topping quarterly profit, while U.S.-focused Baker Hughes Inc came up short in a tough quarter closer to home. Shares of global oilfield services leader, Schlumberger rose 4.3 percent to $81.88, touching a near-two-year high briefly, while Baker Hughes fell 4 percent to $47.14. UBS analyst Angie Sedita was impressed by Schlumberger's strong execution in almost every region. "Additionally positive data points for continued strength in the international and deepwater markets support strong growth in the years ahead," she wrote in an investor note. Schlumberger said second-quarter net income rose 49 percent to $2.1 billion, or $1.57 per share, in the second quarter, from $1.4 billion, or $1.05 per share, a year earlier. Excluding certain items, its profit was $1.15 per share, whereas analysts had expected $1.10, according to Thomson Reuters I/B/E/S. Schlumberger, which makes more than two-thirds of its revenue outside North America, is better insulated from the uncertain oilfield market in the home country of rivals Halliburton Co and Baker Hughes over the rest of 2013.Exploration and drilling rebounded in China and Australia and growth continued in the key markets of Saudi Arabia and Iraq, Schlumberger Chief Executive Paal Kibsgaard said. Yet U.S. natural gas prices have remained weak due to excess supply from shale fields. Both Schlumberger and Baker Hughes saw strong activity in the Gulf of Mexico and improved deployment of hydraulic fracturing equipment, but Kibsgaard expected the fracking market to be oversupplied for the rest of this year. Incorporated in Curacao, Schlumberger has major offices in The Hague, Paris and Houston. Overall, the near-term U.S. outlook is positive, with Barclays this week tallying a 4 percent rise in drilling permits in June in the 30 states it surveys. Analysts sense drilling budgets may come under pressure before year-end, though Kibsgaard believed budgets for services would hold up. "So that obviously would be good for our business, because that is sort of where we make most of our money," he said. Baker Hughes CEO Martin Craighead said he expected a strong rebound in North American operating margins in the third quarter as activity in Canada returns to normal. Baker's Canadian revenue and profits declined significantly as rig counts dropped to their lowest levels in four years in the annual spring slowdown as melting ice disrupts oilfield activity. The company's 45 percent fall in overall second-quarter profit was mainly due to lower margins in North America, as well as weakness in Latin America. The U.S. gas-directed rig count fell to an 18-year low of 353 in June, while the rig count outside North America climbed to 1,333, the highest level in 30 years, according to data compiled by Baker Hughes. Baker Hughes executives predicted the total U.S. rig count would average 8 percent lower in 2013, though because of the greater efficiency of drillers, the onshore well count would decline by only 4 percent to 35,000 this year. To save on costs, drillers increasingly sink more wells from single well sites - which also serves to improve the margins of companies selling services to them by making logistics easier. In a sign of the times, Baker Hughes on Thursday launched an onshore U.S. well count to complement its closely watched, seven-decade-old U.S. rig count. "When we compare well count and rig count data side-by-side, we can see that efficiencies in the U.S. are improving and that drilling rigs in some basins are drilling wells faster," Craighead said in a statement. Second-quarter net income for Baker Hughes fell to $240 million, or 54 cents per share. Excluding certain items, earnings were 61 cents per share, below the average estimate of 65 cents. Revenue rose 3 percent to $5.5 billion. Prior to Friday, shares of Schlumberger and Baker Hughes had risen about 10 percent in the past three months. Shares of Halliburton, which reports earnings on Monday, have risen 19 percent on news the company may settle its liability related to the 2010 Gulf of Mexico oil spill.