By Anna Perez and Christopher Bjork

MADRID--Spanish utility Iberdrola SA on Wednesday reported rising operating income as its renewable energy and network businesses grew and income from abroad was flattered by a weaker euro, offset in part by weaker power generation.

Still, net profit at Spain's largest power company by market value, edged down 0.7% to 841 million euros ($923.7 million) compared with EUR847 million in the same period last year, due to an absence of gains from asset sales. Last year's figure was boosted by gains from the sale of Iberdrola's EDP-Energias de Portugal SA (EDP.LB) stake.

Revenue rose 5.5% to EUR8.78 billion while earnings before interest, taxes, depreciation and amortization grew 8.8% to EUR2.14 billion, ahead of analysts' expectations. The strength of the U.S. dollar and U.K. pound boosted sales from Iberdrola's operations in the U.S. and the U.K., most of which saw growth in both their electricity grid businesses and in renewable energy. The Latin American business also performed well, while at home, a drop in electricity production boosted prices of Iberdrola's output from wind farms and hydroelectric plants.

Iberdrola said electricity generation fell 7.6% in the first quarter from the previous year, dragged down by declines in Spain and the U.S. But demand was higher in Spain, particularly among industrial clients, which are starting to recover as the economy rebounds after a six-year crisis.

"The company is doing well, our expectations are very positive for the year," said Executive Chairman Ignacio Galan.

Iberdrola has recently focused investment outside Spain. In February, it agreed to buy U.S. power and gas distributor UIL Holdings Corp. (UIL) in a cash-and-stock deal that values the U.S. firm at $3 billion, and it has also bet aggressively on building off-shore wind parks in the U.K. It is also building more power plants in Mexico, another key growth market for the Spanish company.

Mr. Galan said that Iberdrola plans to update its strategy in the first quarter of 2016, once the U.S. acquisition has been finalized.

Write to Anna Perez and Christopher Bjork at anna.perez@wsj.com and christopher.bjork@wsj.com

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