CBS Corp., owner of the most-watched U.S. television network, gained the most in 21 months in New York trading after doubling its dividend and reporting first-quarter profit that beat analysts’ estimates.

The quarterly payout will rise to 10 cents from 5 cents, New York-based CBS said yesterday. Net income of $202 million, or 29 cents a share, beat the 19-cent average of analysts’ estimates after gains in broadcasting, pay TV and outdoor advertising.

A new deal to broadcast the NCAA college basketball tournament helped the CBS broadcast network generate higher revenue and profit than expected, said David Joyce, an analyst with Miller Tabak & Co. in New York. Profit in the entertainment, cable and broadcast units all beat his estimates.

“The big swing factor was the NCAA tournament deal with Turner,” Joyce said in an interview after the results. “Nobody knew the exact structure of that deal and it was the biggest factor in their beat.”

CBS, controlled by Chairman Sumner Redstone, rose $1.77, or 7 percent, to $27.01 at 9:49 a.m. in New York Stock Exchange composite trading, after climbing as much as 9.8 percent for the biggest intraday gain since August 2009. The shares had gained 32 percent this year before today.

The first-quarter profit compared with a loss of $26.2 million, or 4 cents a share, a year ago, CBS said. Sales fell to $3.51 billion, beating the $3.45 billion average of 18 analysts’ estimates.

Netflix Latin America

Ahead of the announcement, Bloomberg estimated CBS would raise its dividend to 8 cents. CBS said it spent $250 million to buy back stock in the quarter and had $972 million in cash as of March 31.

CBS is “in serious talks” with Netflix Inc. to expand online streaming of the broadcaster’s television shows into Canada and Latin America, Chief Executive Officer Leslie Moonves said during the conference call.

The network still doesn’t know if “Two and a Half Men,” TV’s most-watched comedy, will return in September after CBS and the show’s producer, Time Warner Inc.’s Warner Bros. Television, fired actor Charlie Sheen for comments attacking show creator Chuck Lorre. Warner Bros. is exploring how to bring back “Two and a Half Men,” Moonves said.

Moonves also said CBS is open to talking with JCDecaux SA, the French billboard company that has expressed interest in CBS’s outdoor-advertising business, most recently in March. CBS isn’t actively seeking a buyer for its billboard operation, he said.