NEW York (Reuters) - Nabors Industries Ltd., the world's largest onshore drilling contractor, on Monday said its first-quarter profit fell 12 percent, hurt by weakness in its North American business, but the results beat Wall Street expectations and shares rose more than two percent.

Net profit in the quarter was $231 million, or 81 cents per diluted share, compared with $262 million, or 92 cents per diluted share, a year earlier.

Revenue for the Hamilton, Bermuda, company was $1.32 billion, up from $1.28 billion a year earlier.

The profit beat Wall Street forecasts of 76 cents per share, according to Reuters Estimates, and Nabors shares rose 2.8 percent to $38.98 in after-hours trading from their close of $37.72 on the New York Stock Exchange.

Earnings at the company's continental US land drilling arm fell 27 percent to $127 million in the quarter, while its Canadian earnings slipped more than 20 percent percent to $42 million.

However, earnings outside North America were strong, with the international segment posting a 37 percent gain to $90.7 million.

Shares in Nabors have rallied 36 percent this year, outpacing the 10 percent gain in the broader Philadelphia Oil Service index.