UPDATE 2-Enbridge profit climbs as company touts projects

(Recasts with additional comments and details. Changes dateline, previous TORONTO.)

By Scott Haggett

CALGARY, Alberta, May 7 (Reuters) - Enbridge Inc (ENB.TO: Quote, Profile, Research) said on Wednesday its first-quarter profit climbed 11 percent as the company moves ahead on C$12 billion ($12 billion) in projects to carry oil sands crude to U.S. markets.

Enbridge, whose pipes carry the lion's share of Canada's oil exports to the United States, earned C$253 million, or 70 Canadian cents a share, in the quarter, up from a year-earlier C$228.7 million, or 64 Canadian cents a share, as returns improved from its oil pipelines and its gas-distribution business strengthened.

Operating earnings, which exclude most one-time gains and charges, rose 4.1 percent to C$238.9 million, or 67 Canadian cents a share, from C$229.4 million, or 65 Canadian cents, in the first quarter of 2007.

"This provides a very solid base for meeting our full-year...guidance," Pat Daniel, Enbridge's chief executive, said on a conference call. "We're very pleased with the start of the year."

The operating result just surpassed the average 66 Canadian cents per share profit forecast among analysts polled by Reuters Estimates.

Enbridge also said it was unlikely to issue shares to pay for its expansion projects, arguing it can meet the call on its funds by having investors convert their dividends into stock and by selling assets, including C$1.3 billion expected from the sale of its stake in a Spanish pipeline network.

"A conventional equity issue is at the bottom of the list because we believe our share price is not yet reflecting our growth outlook," said Richard Bird, Enbridge's chief financial officer. "Issuing shares is definitely not a preferred financing strategy."