Halliburton Co , the world's second-largest oilfield services company, reported a 46 percent drop in first-quarter profit on Monday, hurt by charges in Venezuela and weak demand across Latin America.

Profit margins across the industry have suffered since companies such as Halliburton and its larger peer Schlumberger Ltd cut prices last year when their oil and gas producing customers slashed spending on new projects.

U.S. natural gas drilling helped lift sales in North America above the year-earlier level, but revenue and profit in the rest of the world slumped.

All the upside was North America, said Kurt Hallead, analyst with RBC Capital, but in the rest of world, margins were weaker than everybody expected.

Halliburton's first-quarter net profit fell to $206 million, or 23 cents per share, from $378 million, or 42 cents per share, in the same quarter a year earlier.

Excluding a $31 million charge from Venezuela's currency devaluation and a $10 million tax expense charge there, the company's earnings per share of 28 cents topped analysts' average forecast for earnings of 25 cents per share.

Revenue fell 4 percent to $3.76 billion, in line with Wall Street expectations.

LATAM 'DISAPPOINTING'

In a statement, Halliburton Chief Executive Dave Lesar called the Latin American results disappointing, citing declining activity in Mexico and delays in new projects.

In Mexico, auditors have urged Mexico's state oil monopoly Pemex to slash its oil and gas estimates at the flagship Chincotepec project, in which Halliburton has service contracts.

Revenue and profit in the Eastern Hemisphere fell, hurt by the lower prices and harsh weather, the company said, but those markets appeared to bottom out in the first quarter.

Tangible indications are that, barring any major economic disruption, the industry is likely to experience a steady resurgence in international activity in the second half of the year and into 2011, Lesar said in the statement.

Halliburton is the first major oilfield services company to report results for the latest quarter. Weatherford Ltd is due to unveil its figures on Tuesday, followed by sector leader Schlumberger Ltd on Friday.

Halliburton's shares slipped 1.4 percent to $31.27 in premarket trading.

(Reporting by Matt Daily, additional reporting by Braden Reddall in San Francisco; Editing by Maureen Bavdek and Derek Caney)

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