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CHICAGO/NEW YORK (Reuters) - Coca-Cola Co (KO.N) reported stronger-than-expected quarterly sales on Tuesday as higher demand for its beverages in China, India and Brazil offset a drop in North America, sending the world's largest soft-drink maker's shares up 2.6 percent.
Lower costs and volume gain helped boost profit, which was in line with analysts' estimates. The company gained market share in the carbonated and noncarbonated drinks markets.
Results continued a trend for the maker of Diet Coke, Sprite and Dasani water, which has relied on strength overseas to counter a weak North American market beset by high unemployment and low consumer confidence.
"This continues to be a story about emerging market growth," Morningstar analyst Phil Gorham said.
He noted "some really strong numbers in China and India, particularly when you (consider) that they are actually cycling a pretty strong quarter in '08."
Coca-Cola said net income attributable to shareholders rose to $1.54 billion, or 66 cents per share, from $995 million, or 43 cents per share, a year earlier.
Analysts on average were expecting 66 cents per share, according to Thomson Reuters I/B/E/S.
Net operating revenue rose 5 percent to $7.51 billion, topping analysts' average forecast of $7.22 billion.
Sales by volume -- an important measure reflecting the amount of beverage concentrate sold -- rose 5 percent, outpacing gains of 2 percent in the third quarter, 4 percent in the second quarter and 2 percent in the first quarter. Several analysts, such as Stifel Nicolaus's Mark Swartzberg, expected volume to grow about 2 percent.
Still, Coke gave a tepid outlook for the current year.
"With consumers still challenged by a mixed global recovery, there again may be bumps along the way with quarter-to-quarter volatility still possible as we move through 2010," Coke CEO Muhtar Kent said on a conference call.
Kent later told reporters 2010 will be "a difficult environment," due to high unemployment in North America, Europe and Japan, as well as economic troubles in emerging markets of Latin America, Mexico and the Philippines.
Nonetheless he stood by Coke's long-term annual growth targets, which call for 3 percent to 4 percent volume growth, 5 percent to 6 percent revenue growth and high single-digit earnings per share growth. In November, Coke said it aims to double the revenue and its bottlers generate to roughly $200 billion by 2020.
Kent also said foreign currency exchange rates would provide a slight benefit to results in 2010.
Fourth-quarter volume rose 11 percent in the Pacific region, driven by a 29 percent increase in China, where Coke said it will continue to focus on generating double-digit annual growth rates.
"The per capitas (consumption rates) are still so low in China. We're just getting started, but again, it takes a lot of investment, a lot of effort to generate a quarter of a billion cases of incremental growth a year in China," Kent said.
Quarterly volume rose 7 percent in Latin America, 1 percent in Europe and 5 percent in the company's Eurasia and Africa division, which was helped by a 28 percent increase in India.
The company said its results will include a $100 million loss in the current first quarter related to revaluing its assets in Venezuela.
Volume fell 1 percent in the closely watched North American market because of continued pressure on consumer spending and weak traffic to restaurants. Still, that decline was smaller than the third quarter's 4 percent decline and JP Morgan analyst John Faucher's expectation for a 2 percent decline.
Coke's carbonated beverage volume rose 3 percent in the quarter. Volume of still beverages, such as juices, teas and waters, rose 9 percent, driven by a 14 percent gain internationally and flat results in North America.
Coke's rivalry with PepsiCo Inc (PEP.N), especially in North America, is poised for a new turn this year, as the No. 2 soft-drink maker is about to complete its acquisition of its largest bottlers, Pepsi Bottling Group Inc PBG.N and PepsiAmericas Inc PAS.N.
Kent has repeatedly expressed his commitment to his company's decentralized, franchise bottling model.
Coca-Cola shares rose $1.36 to close at $54.01 on the New York Stock Exchange.
Reporting by Brad Dorfman with additional reporting by Martinne Geller and Jessica Wohl; Editing by Derek Caney, Maureen Bavdek, Dave Zimmerman and Robert MacMillan