Coca-Cola Co reported higher-than-expected quarterly sales as it gained market share and saw growth in each of its major markets for the first time in at least five years.

The results on Wednesday are Coke's first to include its North American bottling operations. The improvement in the company's home region shows that the October acquisition made sense as well as that the economic recovery is gathering steam.

We'll go so far as to say we have now transitioned from the recovery stage of this economic cycle to the expansion phase, said Hank Smith, chief investment officer of Haverford Investments, which has owned shares in the world's top soft drink maker since 1979.

Even though the recovery will not be widespread until the labor market improves, it is already noticeable in companies' earnings results, Smith said.

It's a good time to be a buyer of equities, he said.

Coke shares, a component in the Dow Jones industrial average <.DJI>, were up less than 1 percent in afternoon trading after rising as much as 2.9 percent earlier in the session.

BOTTLER BENEFIT

Both Coke and rival PepsiCo Inc

acquired their North American bottlers last year as a way to improve performance by cutting costs, speeding innovation and giving themselves more control over distribution.

Coke's fourth-quarter net income rose to $5.77 billion, or $2.46 per share, from $1.54 billion, or 66 cents per share, a year earlier.

Excluding items, earnings of 72 cents per share met the analysts' average estimate, according to Thomson Reuters I/B/E/S.

Net revenue jumped 40 percent to $10.5 billion, topping the analysts' forecast of $10 billion. The bottler acquisition accounted for the bulk of the gain.

Price increases, and selling a larger proportion of higher-priced drinks, contributed 2 percentage points of growth. That more than offset the effect of Coke selling most of its drinks in international markets, where they often cost less than in the United States.

The company said it planned to raise prices in the United States this year as it faces $300 million to $400 million in cost increases related to spikes in corn, juice, metal and plastic.

GAINS IN ALL AREAS

Worldwide sales volume rose 6 percent in the quarter. Excluding the distribution of some Dr Pepper Snapple Group Inc brands taken over with the bottling purchase, volume was up 5 percent.

Including the benefit of those brands, Coke's volume rose 8 percent in North America, 5 percent in Latin America, 2 percent in Europe, 14 percent in the Eurasia and Africa segment, and 1 percent in the Pacific region.

It has been five or six years since the company has posted growth in all of its operating segments, Chief Executive Muhtar Kent told Reuters.

Excluding the Dr Pepper brands, organic volume rose 3 percent in North America, an acceleration from 2 percent gains in the third and second quarters.

Excluding the new brands, volume of carbonated drinks rose 3 percent worldwide. The flagship Coca-Cola brand saw volume rise 4 percent, driven by gains of 37 percent in Russia, 20 percent in Turkey and 10 percent in India.

Volume for beverages such as Powerade sports drink, Minute Maid juice and vitaminwater rose 9 percent, with gains of 7 percent in North America and 11 percent internationally.

Coke shares were up 0.7 percent at $63.29 in afternoon trading on the New York Stock Exchange.

Through Tuesday, the shares had gained 6.3 percent since the bottler acquisition closed in early October, compared with a 15.6 percent rise in the wider Standard & Poor's 500 Index <.SPX> and a 4.2 percent decline for PepsiCo.

(Reporting by Martinne Geller; Editing by Lisa Von Ahn, Dave Zimmerman)

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