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UPDATE 2-Schlumberger posts profit drop, sees international spending rising

(Recasts with international market commentary, adds industry background; updates shares)

April 18 (Reuters) - Top oilfield services provider Schlumberger NV on Thursday forecast a gradual rise in international spending this year, after posting a 20 percent drop in quarterly profit due to weak North America demand.

The oilfield services sector bellwether said it expects a 7 to 8 percent increase in investments by oil producers in markets outside North America.

"We continue to see clear signs that E&P investments are starting to normalize," Chief Executive Officer Paal Kibsgaard said in a statement, adding that international markets would need higher investments to keep production flat.

Spending in international markets have lagged a rise in oil prices and higher U.S. land activity, and Schlumberger previously forecast single-digit growth in international markets this year.

The company reiterated that onshore North America investments will decline 10 percent in 2019, with a likely cut to current production growth outlook.

U.S. oil producers remain wary of boosting spending, despite record U.S. oil production and a recovery in crude oil prices, as they focus on earnings growth to pacify shareholders.

Schlumberger's cash flow from operations fell to $326 million in the first quarter, from $568 million a year earlier.

Net income declined to $421 million in the three months ended March 31, from $525 million a year earlier.

Earnings per share of 30 cents were in line with analysts' average estimate, while revenue of $7.88 billion beat estimates of $7.81 billion, according to IBES data from Refinitv.

"We think Q1' 19 marks the earnings trough for SLB, but we've still questions about what the margins trajectory for the company will look like as attractive international top-line growth finally starts to kick in," Tudor, Pickering, Holt & Co analyst Byron Pope said.

Pretax operating margins dropped 91 basis points to 11.5 percent in the quarter.

Shares of the company, up nearly 31 percent this year to Wednesday close, rose about 1 percent in premarket trading.

Rival Halliburton is expected to post first-quarter earnings on April 22, while General Electric Co's Baker Hughes is set to post numbers on April 30. (Reporting by Arathy S Nair in Bengaluru; Editing by Sriraj Kalluvila)