Coca-Cola sales rise, led by emerging markets

Lower costs and volume gain helped lift 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 that is 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.

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 Chief Executive Muhtar Kent said on a conference call.

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 for investors to gauge Coke's performance -- 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, including Stifel Nicolaus's Mark Swartzberg, were expecting volume to grow about 2 percent.

CHINA DRIVES GROWTH

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.

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 rivalry with PepsiCo Inc is poised for a new turn this year, as the No. 2 soft-drink maker is about to complete its planned acquisition of its largest bottlers, Pepsi Bottling Group Inc and PepsiAmericas Inc .

Kent has repeatedly expressed his commitment to his company's decentralized, franchise bottling model.

Coke's carbonated beverage unit case volume increased 3 percent in the quarter, with international carbonated beverage unit case volume increasing 5 percent, cycling 4 percent growth in the prior year quarter.

Total noncarbonated beverage unit case volume increased 9 percent, driven by growth across a portfolio that includes juices and fruit drinks, teas and water brands. Still, beverage unit case volume jumped 14 percent internationally but was flat in North America.

Coca-Cola shares rose $1.72 to $54.37 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)