Coca-Cola Enterprises Inc raised its 2007 earnings estimate on Wednesday due in part to cost savings and strength in Europe, sending the bottler's shares up 4 percent in morning trade.

The world's largest bottler of Coca-Cola Co drinks, which also cited an expanded drink portfolio and a favorable tax outlook, said it now expects 2007 earnings of $1.36 to $1.39 per share, including the impact of foreign currency translation, up from a prior forecast for $1.31 to $1.36 per share.

Analysts on average were expecting $1.34 per share, according to Reuters Estimates.

The company, which is starting to benefit from Coca-Cola's recent acquisition of vitaminwater maker Glaceau, said the results will include $125 million in restructuring expenses, with an additional $175 million in restructuring costs occurring in 2008 and 2009.

The company also said it expects $700 million in free cash flow in 2007 and capital spending of $1 billion.

In North America, where many health-conscious consumers have been favoring bottled teas and water drinks instead of traditional soft drinks, the bottler estimated that sales volume will decline in a low-single-digit range.

During the year the bottler raised prices on some products in an effort to offset soaring costs for raw materials including corn for sweetener and aluminum for cans. As a result, it said pricing per case should rise in the mid-single-digit range this year, while costs per case are expected to grow in the high-single-digit range.

Next year will be the company's first full year distributing Glaceau and Fuze drinks, which Coca-Cola Co acquired this year, and Campbell Soup Co's V8 vegetable juices and other drinks, which the companies agreed to in June.

Since these products have higher selling prices than traditional soft drinks, Coca-Cola Enterprises said it will see a high single-digit increase in yearly revenue. But that benefit will be partially offset by additional investments aimed at boosting sales of carbonated drinks like Coca-Cola, Diet Coke and Coke Zero.

The company forecast North American volume growth in a low to mid single-digit range. Due to the changing mix of its products, the bottler said it sees pricing per case increasing in a mid single-digit range, while cost of goods per case will increase at a low double-digit rate.

The company, which sells roughly 22 percent of Coke's worldwide volume and about 76 percent of its U.S. volume, said 2008 earnings per share should be in line with its long-term objective of high-single-digit percentage growth.

Morgan Stanley analyst William Pecoriello said the 2008 guidance implied an earnings range of $1.47 to $1.52 per share, which compares to analysts' average estimate of $1.47, according to Reuters Estimates.

Coca-Cola Enterprises shares were up $1.04 at $25.62 on the New York Stock Exchange.