* Baker forecasts modest increase in U.S. rig count for 2013
* Schlumberger remains cautious on North America
* Both companies beat first-quarter profit estimates
* Halliburton reports results on Monday
By Braden Reddall
April 19 (Reuters) - Signs of improvement in the depressed North American drilling market and steady growth elsewhere helped oilfield services companies Schlumberger Ltd and Baker Hughes Inc beat Wall Street's profit expectations.
Sector leader Schlumberger posted earnings above analysts' estimates for the sixth straight quarter, lifted by strong and consistent growth in countries including Saudi Arabia, Iraq, China and Australia.
Schlumberger shares were unchanged at $71 in morning trading. Cowen Securities analyst Jim Crandell said revenue in Europe and Latin America, in particular, fell short of his estimates.
Third-ranked Baker Hughes' profit also topped estimates, and the company forecast a modest increase in U.S. rig counts for 2013. As the United States starts to clear a natural gas glut created by the hydraulic fracturing revolution, prices for the fuel have improved, reducing the drag on drilling activity there.
"North America took a step in the right direction," Baker Hughes Chief Executive Officer Martin Craighead told analysts on a conference call on Friday.
Baker Hughes shares were down 0.7 percent at $44.28.
While overall earnings were down 30 percent from a year earlier, the company said increased drilling in Canada and a strong pumping business lifted its first-quarter profit in North America from the previous quarter.
UBS analyst Angie Sedita said Baker had a solid quarter in the Middle East as well as North America, two areas of relative weakness in the past. "We expect further margin gains ahead (at a measured pace) across regions in 2013," she wrote in a note to investors.
Looking at signs that U.S. land drilling was improving, Barclays analysts said the number of permits issued in the country rose by 8 percent in March from February.
Schlumberger, which said last month that North American activity was weaker than expected, said it was still uncertain about the region. Low natural gas prices had made drilling for gas uneconomical in many fields and weighed down the prices charged for services like pressure pumping, which is used in hydraulic fracturing, or fracking.
Schlumberger, whose main offices are in Paris, Houston and The Hague, generated roughly two-thirds of its 2012 revenue outside North America, insulating itself from the always-volatile drilling region more than Halliburton or Baker Hughes did.
Schlumberger CEO Paal Kibsgaard said the outlook for drilling activity in international markets and for liquids in North America remained "pretty solid" at current oil prices.
Kibsgaard stuck with his forecast that client spending outside North America would rise 10 percent this year, lifting Schlumberger earnings by a double-digit percentage rate.
Schlumberger's first-quarter net income fell 3 percent to $1.26 billion, or 94 cents per share. Excluding items, it was $1.01 per share, while revenue rose to $10.67 billion. Analysts had expected earnings of 99 cents per share on revenue of $10.7 billion, according to Thomson Reuters I/B/E/S.
Strong activity in Canada and solid results from the U.S. Gulf of Mexico only partially offset weakness in U.S. land drilling, the company said. While U.S. natural gas prices rose 15 percent in the quarter, drilling has not yet bounced back, and gas producers have trimmed 2013 exploration budgets.
As for Baker Hughes, its first-quarter net income fell to $267 million, or 60 cents per share, from $379 million, or 86 cents per share.
Excluding a $23 million loss from Venezuelan currency devaluation, the company earned 65 cents per share, above Wall Street expectations of 62 cents. Revenue fell 2 percent to $5.23 billion, beating analysts' estimates of $5.18 billion.
Halliburton, the U.S. market leader and the largest fracking company, is due to report earnings on Monday.