May 14 (Bloomberg) -- Profits at U.S. companies rose by more than 10 percent for the 19th straight quarter in the period ended March 31 as MasterCard Inc., Hewlett-Packard Co. and Prudential Financial Inc. surprised analysts with better-than- estimated earnings.

Companies in the Standard & Poor's 500 Index through May 11 reported an average earnings gain of 13 percent in the quarter, according to data compiled by Bloomberg. The last time growth was less than 10 percent was the second quarter of 2002.

International sales helped by a weaker U.S. dollar and continued spending by U.S. consumers fueled the earnings advance. Concerns that the U.S. housing slump and rising delinquencies by subprime mortgage holders would damp profits have eased, analysts said.

The results are ``an upside surprise anyway you slice it,'' said Alec Young, an equity market strategist at Standard & Poor's in New York. Worries about housing and mortgages were ``wrong-headed,'' he said.

First-quarter earnings advanced four times faster than analysts had projected as of April 13, as 76 percent of the 444 companies in the S&P 500 that reported through May 11 met or topped projections. Twenty-seven percent beat estimates by at least 10 percent.

Unexpected Surge

Earnings grew in most industries, led by telecommunications services and information technology. One exception was the consumer discretionary group, which includes homebuilders such as D.R. Horton Inc. and automaker General Motors Corp., whose earnings were dragged down by bad loans at its finance unit.

The unexpected surge in profits helped push the Dow Jones Industrial Average to a record 13,369.2 on May 9, while the S&P 500 closed that day within 1 percent of its 2000 record. The Dow finished at 13326.2 on May 11, up 6.9 percent for the year. The S&P 500 was at 1505.8, up 6.2 percent this year.

Profit at MasterCard, the world's second-largest card network behind Visa International Inc., climbed 70 percent to $214.9 million, or $1.57 a share, beating the $1.16 average estimate of 12 analysts surveyed by Bloomberg. The company, benefited from a surge in customers using their first credit and debit cards.

Hewlett-Packard, the world's largest maker of personal computers and printers, on May 8 said second-quarter earnings beat its forecast on higher sales of servers and home PCs. Sales increased to as much as $25.55 billion, up from its $24.5 billion projection.

Weak Dollar

Prudential, the second-largest U.S. life insurer, said new customers helped boost operating profit by 30 percent to $868 million, or $1.85 a share, compared with the $1.65 average estimate of 14 analysts surveyed by Bloomberg. Operating profit doesn't account for investment gains or policies sold before Prudential went public.

Overseas sales and favorable foreign exchange rates improved sales at companies ranging from McDonald's Corp., the world's largest fast-food chain, to 3M Co., maker of 50,000 products from Post-it notes to road signs.

The U.S. dollar averaged 76 cents a euro in the quarter, versus 83 cents in the year-earlier period. The dollar fell to a record low of 73 cents per euro on April 27.

Stronger foreign currencies make U.S. products more competitive in price and result in more dollars when overseas sales are converted to dollars.

McDonald's, which derives two-thirds of its sales outside the U.S., posted a 22 percent increase in profit to $762.4 million. 3M earnings climbed 52 percent to $1.37 billion. The company generates 61 percent of its sales abroad.

Soaring Drugmakers

Health-care companies reported 14 percent profit growth for the quarter, the largest increase since the second quarter of 2004. The eight biggest U.S. drugmakers beat first-quarter estimates in April and half of them raised their forecasts. The companies are being helped by a new U.S. drug insurance program as they head toward their biggest gain since 2000.

Schering-Plough Corp.'s net income rose 52 percent to $565 million, its biggest increase in seven years, on sales of cholesterol drugs. Profit at Merck & Co. rose 12 percent to $1.7 billion as sales of asthma and cholesterol drugs and the cancer vaccine Gardasil made up for declining revenue of older medicines because of competition from generic drugs.

Profits of companies in the consumer discretionary group fell 8.9 percent from a year ago, according to the data compiled by Bloomberg. Without auto makers and home builders, the sector's profits grew by 9.1 percent.

Raising Forecasts

D.R. Horton, the largest U.S. homebuilder by market value, missed analysts' estimates as profit tumbled 85 percent on slumping housing demand. General Motors, the world's biggest car maker, said first-quarter profit plunged 90 percent.

The second quarter may continue the streak of earnings growth topping 10 percent. Almost as many companies are raising forecasts as lowering them, said Nick Raich, director of research at National City Private Client Group, which oversees $34 billion in Cleveland.

``Typically we see three companies lowering for every company raising,'' Raich said. He called the forecasts ``a very positive sign'' and said analysts' second-quarter profit estimates are ``too low.''

Analysts have raised their second-quarter growth estimates to 3.5 percent from an April 20 average of 2.5 percent and third-quarter estimates to 5.7 percent from 4.8 percent, according to Bloomberg data.

To contact the reporter on this story: Tom Randall in New York at trandall6@bloomberg.net

Last Updated: May 14, 2007 00:03 EDT