* Q3 adjusted EPS 46 cts matches Wall Street view
* Cuts 2008 EPS view to $1.25 to $1.29 from $1.40 to $1.45
* Shares down 17.2 percent
* Coke shares down 4.7 percent (Corrects to show that Coke owns 35 pct, not 40 pct, of Coke Enterprises) (Recasts, adds details on Coke, analysts' comments, byline)
By Martinne Geller
NEW YORK, Oct 23 Bottler Coca-Cola Enterprises Inc CCE.N said on Thursday it faced lower funding and higher concentrate prices from Coca-Cola Co (KO.N) that would cut into its full-year profit, sending shares down 17.2 percent.
Coke owns about 35 percent of Coke Enterprises, its largest bottler, and sells it the concentrate, or syrup, used to make bottled drinks.
Coke Enterprises said fourth-quarter results would be hurt by a $35 million cut in funding from Coke, and a high single-digit increase in North American beverage concentrate costs.
Morgan Stanley analyst William Pecoriello said it was rare for Coke to raise concentrate prices before year-end and questioned Coke's motives, since trouble at the bottler hurts the world's largest soft drink maker as well.
"The ultimate end game will be the transformation of Coke Enterprises and significant structural changes to the business," Pecoriello said in a research note.
"In the meantime, this confusion will only act to pressure Coke Enterprises and Coke shares as the battle is fought out publicly," he said.
A Coke spokesman said the $35 million will be reallocated to marketing projects but declined to comment on the pricing action.
The news comes a day after Coke Chief Financial Officer Gary Fayard resigned from the bottler's board of directors.
Credit Suisse analyst Carlos Laboy said the resignation may indicate continued friction in the companies' relationship or a conflict of interest in Coke's role as both a supplier and equity investor in Coke Enterprises.
Coke Enterprises said net income fell to $214 million, or 44 cents per share, in the third quarter, from $268 million, or 55 cents per share, a year earlier.
Excluding items, the bottler earned 46 cents per share, matching analysts' average estimate, according to Reuters Estimates.
Revenue rose to $5.74 billion from $5.41 billion a year ago, helped by a 2.5 percent increase in volume and a 3.5 percent increase in pricing per case.
"Our performance remains below our expectations as we work through a combination of significant marketplace challenges, including a weakened North American economic environment," said Chief Executive John Brock.
The company said it it is still conducting a business review of its North American operations and will give an update in December.
In the past, Coke has said it has no near-term plans to acquire Coke Enterprises, which bottles and sells about 80 percent of all Coke drinks sold in North America and is the sole distributor in Britain, France and the Benelux countries.
The bottler said North American volume rose 1.5 percent in the quarter, helped by promotions. But a September price increase should limit sales moving forward in the near-term.
Coke Enterprises lowered its full-year earnings per share outlook, saying it now expects 2008 profit of $1.25 to $1.29, excluding items. That is down from a prior forecast of $1.40 to $1.45 per share.
The company's shares fell $1.90 to $9.14 on the New York Stock Exchange. Coca-Cola Co shares dropped $2.11 to $43.27. (Reporting by Martinne Geller, editing by Gerald E. McCormick, Dave Zimmerman)