May 15 (Bloomberg) -- Tiffany & Co., the world's second- largest luxury-jewelry retailer, said first-quarter profit exceeded a previous forecast and boosted its dividend 13 percent, causing the shares to rise the most since March.

First-quarter profit probably surpassed a previous projection of about 39 cents a share, New York-based Tiffany said in a statement today.

Tiffany has been withstanding a slowdown in U.S. spending, partly through faster international sales. American consumers have been discouraged by the worst housing slump in a quarter century and job cuts.

``We've had a promising start to the year,'' Chief Executive Officer Michael Kowalski said in the statement. ``While we remain cautious about U.S. economic conditions, net earnings in the first quarter will surpass our previous expectation.''

Tiffany rose $3.03, or 6.6 percent, to $48.88 at 4 p.m. in New York Stock Exchange composite trading for the biggest increase since March 24. The shares were little changed this year through yesterday.

The retailer will pay a 17 cent-a-share dividend on July 10 to investors who hold the stock on June 20.

The company will release its earnings May 30.

To contact the reporter on this story: Cotten Timberlake in Washington at ctimberlake@bloomberg.net

Last Updated: May 15, 2008 16:11 EDT