Sotheby's, the world's second-largest auction house, said profit jumped 48 percent, beating analysts' estimates. The results were helped by rising prices for art including a Mark Rothko painting. Second-quarter net income increased to $107.3 million, or $1.64 a share, compared with profit from continuing operations of $72.4 million, or $1.17, a year earlier, Chief Executive Officer William Ruprecht said today in a statement. The company also raised its quarterly dividend to 15 cents a share from 10 cents. Sotheby's and its larger competitor, Christie's International, are benefiting from an 11-year quadrupling of contemporary-art prices. That may stall if the $1.7 trillion hedge-fund industry, which includes art buyers such as Steven Cohen and Kenneth Griffin, keeps losing money in the credit and equities markets, analysts said. "Hedge funds have been a relatively powerful component of the rise in interest and prices for the contemporary-art category," George Sutton, an analyst at Craig-Hallum Capital Group LLC in Minneapolis, said in an e-mail before the results were announced. He has a "buy" recommendation on the stock. Sotheby's shares, which have gained 51 percent this year, closed at $50.04, up $3.16 in New York Stock Exchange composite trading. Art and Capital Markets Sotheby's business hasn't always been affected by turbulence in the financial markets, Chief Executive Ruprecht said today in a telephone interview. "The disruption in the financial markets has so far had a bigger effect on the U.S. than elsewhere," he said. "We have participants in the art market from all over the world -- the Middle East, Asia, Europe, Russia and the U.S. Big Dow drops or capital market melting in the past haven't had a big effect on our business."Salaries and related costs increased $14.8 million, or 21 percent, in the quarter. Last month, Sotheby's hired Lisa Dennison, director of the Solomon R. Guggenheim Museum in New York, to buttress its contemporary-art department. "Our results continue to demonstrate prudence in the way we're managing expansion," Ruprecht said in the interview. Private sales of art totaled $172.6 million, up 45 percent, as the auction house extended its reach into territory dominated by dealers such as Larry Gagosian. Sotheby's, whose next big auctions are in New York in November, is "looking forward to a strong fall season," Ruprecht said. Warhol, Hirst The auction houses have become more dependent on contemporary art sales as a new generation of buyers opted for artists such as Andy Warhol, Rothko and Damien Hirst. Sotheby's second-biggest auction this year was a contemporary-art sale that took in $254.9 million on May 15, including David Rockefeller's $72.8 million Rothko painting. A series of contemporary sales in May totaled $344.6 million, 86 percent more than a year earlier, making it the largest auction category of the season. Impressionist and modern auctions took in $337.2 million, up 36 percent. Private Sales Sotheby's revenue from auctions, private sales and other businesses increased to $339.5 million, up 37 percent. Net income was the same as profit from continuing operations in the second quarter. A year earlier, Sotheby's had a 2-cents-a -share loss in the quarter from a discontinued real-estate business, and reported net income of $1.16 a share. Five analysts expected Sotheby's to report profit of $1.47 a share on average from continuing operations, according to Bloomberg data. In the first six months, Sotheby's sold $3.24 billion of art, including $2.87 billion at auctions, plus private transactions of $334 million. London-based Christie's sold 1.52 billion pounds ($3.09 billion) of art and collectibles at auctions in the first half, and handled 82 million pounds of private transactions.