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* Q2 earnings per share 73 cents vs 72 cents expected
* North American profit margins improve, seen rising more
* Shares fall 1.1 percent
By Braden Reddall
July 22 (Reuters) - Halliburton Co on Mondaydelivered a higher-than-expected quarterly profit as it foundgreater success outside its natural gas-engorged home market inthe United States.
The world's second-largest oilfield services company alsosaid it boosted its share repurchase program by $4.3 billionafter buying $1 billion worth of its shares in the secondquarter and leaving only $700 million authorized from anexisting program set up in 2006.
Chief Executive Dave Lesar said the refreshed $5 billionbuyback reflected growing confidence in the outlook as hepredicted further profit margin improvement in North America.
Analysts at Tudor Pickering Holt said the buybacks wouldgrab as much attention as the results, though Halliburton sharesfell 1.1 percent to $45.32 on Monday after a strong run inrecent months.
"We do not believe the market is yet fully appreciating itssolid and growing international footprint," Sterne Agee analystStephen Gengaro wrote.
The Houston-based company reported a drop in second-quarterprofit to $679 million, or 73 cents per share, from $737million, or 79 cents per share, a year ago. Analysts expected 72cents per share, according to Thomson Reuters I/B/E/S. Revenuerose 1 percent to $7.3 billion.
"Relative to our primary competitors, we have deliveredleading year-over-year international revenue growth for fiveconsecutive quarters," Lesar said in a statement.
On Friday, sector leader Schlumberger Ltd postedhigher-than-expected earnings on greater international exposure,in stark contrast to U.S.-anchored Baker Hughes Inc.
A collapse in pricing for hydraulic fracturing services hasweighed on all players as natural gas drillers have cut back inresponse to weak gas prices, but U.S. activity is showing signsof recovery. Barclays has seen a 4 percent rise in drillingpermits in June in the 30 states it surveys, and the U.S.gas-directed rig count is rising.
Analysts worried about a slump in the fourth quarter, whenexploration and production budgets start to empty out, thoughLesar believes higher oil prices should lead to "budgetreloading." He expected profit margin improvement to continue inNorth America after a 1.2 percentage-point rise to 17.5 percentover the second quarter.
The U.S. gas rig count fell to an 18-year low of 353 inJune, even as the count outside North America climbed to itshighest in 30 years, according to Baker Hughes data.
Halliburton highlighted more activity and sales in Malaysia,China and Angola, while saying that Latin America should bounceback after a disappointing first half.
Halliburton shares are up 23 percent in the last threemonths, versus 18 percent for Schlumberger and 10 percent forBaker Hughes. Halliburton got a big boost in April, when itrevealed talks to settle its liability related to the massive2010 Gulf of Mexico spill.
The company said the talks slowed recently because BP Plc, operator of the blown-out well, has been in a legalbattle over a separate settlement of claims with people andbusinesses in the Gulf states.
