NEW YORK - Halliburton Co posted a 61 percent drop in quarterly profit on Friday, hurt by weak North American natural gas activity, but better-than-expected results in the rest of the world helped it top Wall Street forecasts.

The world's second-largest oilfield services company said third-quarter profit fell to $262 million, or 29 cents per share, from $672 million, or 76 cents per share, a year earlier. Revenue fell 26 percent to $3.6 billion.

Excluding $19 million in charges for cutting jobs, earnings per share of 31 cents topped the 26 cents that analysts on average had forecast, according to Thomson Reuters I/B/E/S.

Halliburton, which warned last month that its third-quarter margins in North America would decline from the previous quarter, saw North American operating profit tumble by more than 90 percent and revenue shrink by 43 percent from a year earlier.

But revenue and profit in the rest of the world held up better than expected, one analyst said.

Internationally levered service companies should do well based upon these results given robust Eastern Hemisphere performance displayed by (Halliburton), Simmons & Co International analyst Bill Herbert said in a note to investors.

Revenue in the Middle East, Asia, Europe, Africa and the former Soviet region slipped about 10 percent, while Latin America posted a 16 percent decline.


U.S. natural gas prices hit their lowest level in nearly eight years in September, although they have started a recovery that many analysts expect to continue steadily into next year.

That rebound has helped stem declines in prices for oilfield services, but margins in the key North American market will probably remain under pressure in the fourth quarter.

We believe that North America pricing has stabilized in most basins; however, competition remains fierce in North America, particularly in areas that exhibited growing activity such as the Haynesville and Marcellus shale plays, Halliburton said in a statement.

BMO Capital Markets this week initiated coverage of Halliburton and larger rival Schlumberger Ltd with outperform ratings, in the belief that their earnings were now bottoming and would pick up in 2010.

Schlumberger is due to report its earnings next Friday.

Halliburton shares were up 18 cents at $30.03 in premarket trading. (Reporting by Matt Daily in New York and Braden Reddall in San Francisco; Editing by Lisa Von Ahn)