* Offshore drilling strong in North America
* Middle East and Asia drive international demand
* Schlumberger shares up 2.6 pct, Baker shares up 8 pct
By Braden Reddall
Oct 18 (Reuters) - Increased oilfield activity in U.S. offshore waters and overseas gave a bigger-than-expected lift to profits at Schlumberger Ltd and Baker Hughes Inc , marking a clear divide with struggling smaller U.S. oil services firms.
Shares of Baker Hughes jumped 8 percent to their highest level since 2011 in early trading on Friday while Schlumberger climbed 2.6 percent after both companies reported third-quarter results.
Schlumberger and Baker Hughes executives cited healthy demand from the Middle East and Asia as well as work off the coast of North America, where prices for onshore services remain suppressed by a natural gas glut.
Schlumberger Chief Executive Paal Kibsgaard said he expects double-digit growth in earnings per share in 2014. "Our customers are in their planning process, but at this stage we foresee a continuation of the overall trend seen in 2013, which revealed another year of steady activity growth," he said on a conference call.
In the third quarter, Schlumberger topped analysts' profit estimates for the eighth consecutive quarter with a 20 percent rise, helped by unexpected positives out of the United States.
"Schlumberger highlighted solid performance despite a flattish U.S. land rig count, driven by improved efficiency in its pressure pumping operations, new technology penetration and market share gains," Barclays analyst James West wrote.
A seasonal rebound in Canadian drilling also contributed to record-high quarterly revenue; about two-thirds of total revenue was generated outside North America. The company cited improvement in Saudi Arabia and Iraq.
Net income rose to $1.71 billion, or $1.29 per share, whereas analysts expected $1.24 per share, according to Thomson Reuters I/B/E/S. Revenue grew 11 percent to $11.61 billion.
UBS analyst Angie Sedita said earnings would only rise further with the efficiency drive outlined by Kibsgaard last month.
Baker Hughes reported third-quarter net income growth of 22 percent to $341 million, or 77 cents per share. Excluding items related to restructuring in Latin America, it earned 81 cents per share, while analysts had expected 78 cents.
The Houston-based company has ramped up operations outside North America, where the industry bellwether rig count it compiles is at three-decade highs.
Smaller U.S.-focused players, exemplified by Superior Energy Services and its profit warning earlier this week , are facing a tougher time as drillers become more efficient at well sites.
Baker Hughes said it expects the U.S. rig count to average 1,750 rigs for 2013, down 9 percent from 2012, though the industry was drilling about 6 percent more wells per rig. The international count was expected to average 1,300 rigs in 2013, up 5 percent from last year.
Shares of Schlumberger and Halliburton Co have risen about 17 percent in the past three months, while Baker Hughes has gained 6 percent.