* Q2 adj EPS $0.79 tops Street view of $0.69
* Revenue slips 0.5 pct to $5.88 bln
* Sees '10 EPS $1.73-$1.77; Street view was $1.72/shr
* Shares up .7 pct (Recasts with comments from company, analysts)
NEW YORK, July 28 (Reuters) - Coca-Cola Enterprises Inc (CCE.N) reported higher-than-expected quarterly profit and raised its 2010 forecast, but the forecast implied weakening North American profits and muted investor enthusiasm.
Shares of the largest bottler of Coca-Cola Co (KO.N) drinks were up nearly 1 percent in midday trade.
The bottler forecast North American revenue to be flat to down at a low single-digit rate and operating income to be up at a mid single-digit rate for the full year. Analysts on a conference call said that forecast implied declining profits for the back half of the year.
Steve Cahillane, who runs the company's North American business, acknowledged that the forecast was cautious.
He told analysts on a conference call that the company would give another business update following the key summer selling season.
"We'll be less cautious, I would imagine, as we come out of Labor Day than we are today," Cahillane said.
Coca-Cola Enterprises buys soft drink concentrate from Coca-Cola and mixes, bottles and distributes drinks. It is in the process of having its North American operations acquired by Coke, its largest supplier and shareholder.
The bottler said the deal was on track to close in the fourth quarter, after which it will operate solely in Europe, in countries such as France, Great Britain and the Netherlands.
The company also expects to buy back about $1 billion in shares in the 18 months following the deal's closing. Stifel Nicolaus analyst Mark Swartzberg said that contributed to "an attractive risk/reward" profile for company shares.
PepsiCo Inc (PEP.N) already bought its largest bottlers in a bid to cut costs and have more control over distribution in North America, where an explosion of beverage varieties has made distributing drinks more complex.
PROFIT, OUTLOOK TOP STREET ESTIMATES
Net income rose to $356 million, or 69 cents per share, in the second quarter, from $313 million, or 64 cents per share, a year earlier.
Excluding restructuring costs and other items, the company earned 79 cents per share, topping analysts' average estimate of 69 cents per share, according to Thomson Reuters I/B/E/S.
Net operating revenue slipped 0.5 percent to $5.88 billion, missing analysts' estimates, as the weaker euro reduced the value of sales from Europe when translated into dollars. Excluding the impact of currency, revenue rose 1 percent.
Coke Enterprises said quarterly sales volume rose 0.5 percent in North America, with an increase of 1.5 percent for its trademark Coca-Cola, Diet Coke and Coca-Cola Zero drinks.
In addition to modest volume growth, the company cited improving pricing trends and lower cost of goods in North America.
Volume rose 5.5 percent in Europe, with a 3.5 percent increase in its trademark brands and a 15 percent gain for noncarbonated drinks, driven by expanded distribution of the Capri Sun brand and the addition of the Ocean Spray brand.
The company said it expects 2010 earnings of $1.73 to $1.77 per share, including a hit of 6 cents per share due to foreign exchange rates. Excluding currency, earnings should range from $1.79 to $1.83 per share, above the $1.76 to $1.79 per share range implied by its earlier forecast.
In June, the bottler forecast currency-neutral growth of 10 percent to 12 percent off the $1.60 it earned in 2009. At that time, it also said foreign exchange would shave off about 10 cents per share from its full-year results.
Analysts on average were expecting $1.72 per share.
Coke Enterprises said it expects 2010 operating income to grow in a range of 10 percent to 12 percent, with high single-digit growth in Europe. It expects revenue to grow at a low single-digit rate, with mid single-digit growth in Europe.
Coca-Cola Enterprises' shares were up 20 cents, or .7 percent, at $28.68 in early afternoon trade on the New York Stock Exchange. (Reporting by Martinne Geller, editing by Dave Zimmerman and Gunna Dickson)