Coca-Cola Co reported lower-than-expected quarterly revenue, hurt by declines across all its businesses, and said a weak economy would keep consumers under pressure next year, sending shares down 1.5 percent.

The world's largest soft drink maker echoed comments made earlier this month by rival PepsiCo Inc
, which also posted disappointing revenue and cautioned that it did not expect a major revival of spending in 2010.

We expect the consumer to continue facing economic uncertainties into 2010 and for consumer sentiment to recover slowly, Chief Executive Muhtar Kent said in a statement. He added, however, that the company remains on track to achieve its long-term growth expectations.

Coke's net income rose slightly to $1.90 billion, or 81 cents per share, from $1.89 billion, or 81 cents per share, a year earlier.

Excluding a charge, Coca-Cola earned 82 cents per share. On that basis, analysts on average were expecting 81 cents per share, according to Thomson Reuters I/B/E/S.

Net operating revenue fell 4 percent to $8.04 billion, hurt by foreign currency rates and missing analysts' average estimate of $8.11 billion.

Overall sales by volume rose 2 percent, after rising 4 percent in the second quarter and 2 percent in the first quarter.

Coke's growth in developing markets like India and China -- where quarterly volume soared 37 percent and 15 percent, respectively -- is helping it weather a slowdown in the United States.

Third-quarter volume rose 7 percent in Latin America, 6 percent in the Pacific region and 2 percent in the company's Eurasia and Africa segment. Volume fell 2 percent in Europe and 4 percent in North America.

For the decline in North America, Coke blamed the shift of July 4th holiday sales from the third quarter last year to the second quarter this year, price competition and the weak economy.

Toon Van Beeck, senior industry analyst with research firm IBISWorld, said consumers have been trading down to private label drinks in some categories to try to save money.

Overall volume of carbonated drinks, such as Coca-Cola, Fanta and Sprite, rose 1 percent in the quarter, while noncarbonated drinks, such as vitaminwater, Powerade and Dasani water, rose 7 percent.

COMPETITION HEATS UP

Coke's rivalry with PepsiCo took a new turn this summer when the No. 2 soft drink maker said it would acquire its two largest bottlers after a decade of operating separately.

The $7.8 billion deal led analysts to wonder if Coke might eventually follow suit to erase a competitive advantage, but CEO Kent has since repeatedly expressed his commitment to the franchise model, by which Coke sells drink concentrate to bottlers that package and sell the drinks.

PepsiCo also announced a procurement deal with brewer Anheuser-Busch InBev that allows the beverage makers to save money by buying certain goods and services together.

Coke said it was on track to achieve $500 million in annualized savings by the end of 2011, with plans to deliver more than half of the savings by the end of 2009.

The company also expects its underlying tax rate for 2009 to be 23 percent, down from the 23.5 percent rate it had earlier expected.

UBS analyst Kaumil Gajrawala praised Coca-Cola for recently reinstating its share repurchase plan, strong performance in emerging markets and improving relationship with Coca-Cola Enterprises Inc , its largest bottler.

That said, we prefer PepsiCo shares, which are currently trading at a 2 multiple point discount versus Coca-Cola, Gajrawala said.

Coke shares fell 2.5 percent, or $1.36, to $53.43. Pepsi shares were down 48 cents to $61.57.

(Reporting by Martinne Geller; Editing by Lisa Von Ahn and Derek Caney)