UPDATE 3-E.ON 2007 profits, dividend beat expectations

(Adds comments on expansion, analyst comments)

By Peter Dinkloh

DUESSELDORF, Germany, March 6 (Reuters) - E.ON EONG.DE, the world's largest utility, raised 2007 earnings and its dividend more than expected, benefiting from higher power prices in central and northern Europe and soaring gas prices.

The shares rose in a falling market after the company said on Thursday earnings before interest and taxes (EBIT) rose 10 percent to 9.2 billion euros ($14.1 billion) in 2007, about 100 million euros more than expected on average by 16 analysts in a Reuters poll.

Chief Executive Wulf Bernotat plans to raise the dividend for 2007 to 4.10 euros a share from 3.35 euros, 7 cents more than the average estimate from 15 analysts.

"Today's numbers from International Power (IPR.L: Quote, Profile, Research) and E.ON are a welcome reminder that the power price story is very much intact," Dresdner Kleinwort analyst Lueder Schumacher said in a note to clients.

Power prices in Germany, Europe's largest electricity market, rose close to records in the last three months of 2007 and gas prices are contractually tied to the oil price, which has set several records in the past 12 months.

British-based International Power, which has interests in more than 40 power stations in around 20 countries, said on Thursday profit rose 17 percent in 2007, meeting market expectations, and expects further growth this year.