After five consecutive quarters of falling rig counts, U.S. onshore rig activity will improve through the rest of the year, according to a forecast issued on Friday by Baker Hughes Inc.

There were 1,748 U.S. rigs in operation at the end of the first quarter, CFO Peter Ragauss said during a conference call to discuss the company’s first quarter performance (see related story).

“We anticipate that the rig count will rise to an average of 1,800 rigs for the second quarter,” he said. “This would be the first increase in U.S. rig count following sequential declines over five consecutive quarters. And the rig count is expected to rise over the second half of the year.”

Overall, “the increase from the first quarter is expected to be about 100 rigs, to a 4Q2013 average rate of approximately 1,850 rigs,” said the CFO. “The average annual rig count for 2013 is projected to be 1,810 rigs, composed of approximately 1,400 oil rigs and 410 gas rigs.”

The U.S. rig count includes offshore rigs, which Baker expects to increase by 8% this year to an average of 52 rigs, which would include four more deepwater rigs than last year. The Canadian rig count in 2Q2013 is projected to decline sequentially by 70% to 160 average rigs because of the spring break-up.

“The outlook for the second half of 2013 remains unchanged, with the rig count similar to the same period in 2012,” said Ragauss. “Sequentially, we expect 2Q2013 North America profit margins will decline primarily due to seasonality in Canada. Beyond 2Q2013, anticipated U.S. onshore rig count growth, further utilization increases in our U.S. pressure pumping product line, improved Canadian activity and the shift of Gulf of Mexico activity from exploration to development are all expected to improve revenues and margins” for Baker Hughes. “Based on these activity drivers, we expect that 2Q2013 will be the low point of our North America margins for 2013.”