* Q2 net income $0.90/shr vs $0.21/shr a year-earlier
* Q2 adj EPS $0.95 vs Wall St consensus of $0.84
* Sees 2011 gold output of between 7.6 mln and 8 mln oz
* Sees slightly higher production costs in 2011
* Shares up more than 1.5 pct in New York and Toronto (Adds CEO/CFO comments; In U.S. dollars, unless noted)
By Euan Rocha
TORONTO, Feb 17 (Reuters) - Barrick Gold (ABX.TO) reported a stronger-than-expected quarterly profit on Thursday as increased sales volumes and record-high gold and copper prices offset higher production costs.
Shares of the world's largest gold miner rose on Thursday after it said net income rose to $896 million, or 90 cents a share, from $215 million, or 21 cents, a year earlier.
Excluding one-time items, earnings rose to $947 million, or 95 cents a share, from $604 million, or 61 cents. Analysts on average had forecast earnings of 84 cents a share, according to Thomson Reuters I/B/E/S.
Quarterly revenue also came in much higher than expected, rising 25 percent to $2.95 billion, largely driven by a 22 percent increase in the average realized gold price.
Barrick "significantly beat consensus numbers, production was in line with what we were looking for and costs were in line with what we were looking for, too," said Dundee Securities analyst Paul Burchell.
Gold sales inched ahead to 1.83 million ounces from 1.80 million ounces, as the average realized gold price rose to $1,368 an ounce from $1,119. Copper rose 16 percent to $3.99 a pound.
While total quarterly cash costs rose 4.5 percent to $486 an ounce, full-year costs slipped 1.5 percent to $457.
"Our production targets were met, our cost targets were met and with the strong gold price that translated into pretty solid financial results," said Chief Executive Aaron Regent in an interview with Reuters.
The company expects 2011 gold output of between 7.6 million and 8.0 million ounces, roughly in line with 2010 levels. Average cash costs are expected to be $450 to $480 per ounce. That range's mid-point is slightly above 2010 levels.
Barrick said the higher 2011 production costs primarily reflect lower grades and higher labor costs in South America and Australia.
Regent said the company has kept production cost increases in check through currency and oil-price hedging. Low costs at its new Cortez Hills mine in Nevada have also helped.
Higher costs have weighed on profits of some of Barrick's competitors. Kinross Gold (K.TO) and Agnico Eagle (AEM.TO) both reported large increases in gold production on Wednesday, but profits lagged expectations due to higher costs.[ID:nN16257028]
"We do expect that costs will continue to be under pressure -- on the flip side we expect gold prices to continue to work in favor of producers. So the important metric will remain the margin, and I believe that will continue to expand," said Burchell.
Barrick's copper production for 2011 is expected to be about 300 million pounds at total cash costs of between $1.35 and $1.45 per pound.
The company expects 2011 capital spending of $2.1 billion to $2.3 billion, most of which is focused on developing its Pueblo Viejo project in the Dominican Republic and its Pascua Lama project on the border of Chile and Argentina. Capital costs on both projects are seen rising 10 percent or more.
Although the price of gold has more than doubled over the last few years, reaching $1,400 an ounce in late 2010, Barrick sees no repeat of the gold bubble of the early 1980s.
"In inflation adjusted terms the 1980 high equates to $2,400 per ounce, and we are still more than $1,000 below that peak," said Chief Financial Officer Jamie Sokalsky on a conference call.
"We are not inclined to view the gold price as being anywhere near the top," said Sokalsky. "In fact, we think it has room to go considerably higher."
Barrick shares rose 78 cents to $50.50 on Thursday in New York, while its Toronto listed shares were up 77 Canadian cents at C$49.75. ($1= $0.98 Canadian) (Reporting by Euan Rocha; Editing by Frank McGurty)