* Schlumberger first-quarter profit $1.21/share vs est.$1.20
* Baker Hughes first-quarter adjusted profit $0.84/shr est.$0.78
* Both upbeat on Gulf of Mexico deepwater drilling (Recasts to adds details on outlook risks, new share prices)
By Sayantani Ghosh and Ashutosh Pandey
April 17 (Reuters) - Oilfield services providersSchlumberger Ltd and Baker Hughes Inc eachposted better-than-expected quarterly profit on Thursday, thoughthey said pockets of weakness loom in Brazil, Canada, Russia andother drilling regions.
The results highlight a rapidly changing landscape for theoilfield service industry, where companies are competing for asmaller number of new contracts in North American shale fields.At the same time, they are moving into newer, more-lucrativeEastern Hemisphere regions that have higher logistical risks.
Schlumberger and Baker Hughes, which provide drillingtechnology and equipment, well construction services and seismicsurveys for oil and natural gas companies, have for months beencomplaining of market weakness in North America.
Additionally, Royal Dutch Shell and other large,international oil companies, after a decade of double-digitgrowth in capital budgets, have begun cutting spending as oilprices stagnate and project costs rise, a bad sign for oilfieldservice companies.
Executives from Schlumberger, the world's No. 1 oilfieldservices company by revenue, and Baker Hughes told analysts onconference calls they expect results to slightly improve thisyear in parts of North America but they warned of potentialproblems in other regions.
Schlumberger said deepwater drilling off Brazil shoulddecline 20 percent this year compared with last year and thatrevenue could drop in Russia due to weakness in the rouble. Bothcountries are important markets for Schlumberger.
"Brazil revenue for us this year is going to besignificantly down versus 2013," Schlumberger Chief ExecutiveOfficer Paal Kibsgaard said on a call with analysts, citingslipping demand and less-lucrative contracts signed last year.
Baker Hughes said its revenue this quarter would declineslightly in North America, where it gets half its annualrevenue, partly due to a slowdown in Canada.
GULF OF MEXICO HOLDS PROMISE
Three years after the worst offshore oil spill in U.S.history, large oil and gas companies are ramping up operationsin the Gulf of Mexico, which they expect to yield more than700,000 barrels per day of crude.
"The Gulf of Mexico will play a big role in our NorthAmerican margin growth," Baker Hughes Chief Executive OfficerMartin Craighead said.
While Schlumberger's revenue from deepwater drilling in theregion fell in the first quarter due to operational delays, it expects the situation to normalize this quarter.
"The outlook for deepwater drilling activity in the Gulf ofMexico remains strong for the full year," Kibsgaard said.
Baker Hughes, which said it had a good first quarter in theGulf, expects business in the region to continue to improve andboost margins particularly in the second half of the year.
The company's North American revenue rose 12 percent to$3.68 billion in the first quarter. Baker Hughes posted a 7percent rise in revenue to $2.78 billion from the region.
Baker Hughes' shares rose 4.1 percent to $69.05 in afternoontrading.
Schlumberger's shares, which hit their highest point innearly six years on Thursday morning, fell 0.4 percent to$100.53. The stock has risen about 12 percent in the past month,outperforming shares of Halliburton Co and Baker Hughes.
In the past few quarters, unusually cold weather in NorthAmerica and Russia disrupted drilling, hurting oil and gascompanies while pushing up natural gas prices in North Americaand depleted stockpiles to their lowest level since 2003.
Kibsgaard said the fundamentals of the global economicrecovery were intact despite the harsh winter, slowing growth inChina, and problems in Ukraine.
Schlumberger, which cut its 2014 capital spending budget byabout 3 percent to $3.8 billion, said it expected spending onwell-related activity to rise by more than 6 percent this year.
WEAK LATAM
Schlumberger's first-quarter revenue fell short of analysts'average estimate due to reduced drilling activity and pricingpressure in Latin America.
Revenue from the region declined 8 percent to $1.76 billion,the lowest in eight quarters. Latin America accounted for nearly16 percent of Schlumberger's total sales in the first quarterended March 31.
Schlumberger's profit from continuing operations rose 32.5percent to $1.59 billion, or $1.21 per share, in the firstquarter. Analysts had expected a profit of $1.20 per share.
The company's total revenue rose about 6 percent to $11.24billion, but missed an average estimate of $11.49 billion,according to Thomson Reuters I/B/E/S.
Baker Hughes also posted a 10 percent drop in quarterlyrevenue from Latin America.
The company's adjusted profit rose 27 percent to 84 centsper share, while revenue rose nearly 10 percent to $5.73billion. Analysts on average had expected earnings of 78 centson revenue of $5.71 billion. (Writing by Sayantani Ghosh in Bangalore and Ernest Scheyder inNew York; Editing by Saumyadeb Chakrabarty, Terry Wade and TomBrown)
