NEW YORK (Reuters) — Coca-Cola Enterprises Inc. reported a 6 percent decline in earnings but beat Wall Street estimates yesterday, helped by the European launch of Coke Zero and raw material costs that rose less than expected.Shares in Coke Enterprises, the largest bottler of Coca-Cola Co. drinks, were up 25 cents to $22.52 in afternoon trading after earlier touching a 19-month high.

Coke Zero, its new cola drink with no calories, boosted sales in Europe, which helped to mitigate weaker sales in North America, where tastes are changing to more healthful noncarbonated drinks.

The costs of aluminium, used in cans, and high-fructose corn syrup, used as sweeteners in beverages, continued to climb but not as much as analysts expected.

Its net profit fell to $15 million, or 3 cents per share from $16 million, or 3 cents per share, a year ago. Excluding items such as restructuring costs, profit was even at 9 cents per share, handily beating analysts' 5 cent average forecast, according to Reuters Estimates.

The Atlanta-based bottler affirmed its 2007 forecast and said it expects "significant business headwinds" for the rest of the year.

Coke Enterprises, which is about 35 percent owned by Coca-Cola, said price increases helped revenue rise 5.4 percent to $4.57 billion, ahead of the average forecast of $4.54 billion.

The company, which has pressured Coke to improve its noncarbonated drink line-up amid a growing health-mindedness among North Americans, said sales by volume fell 2 percent.

The bottler said conditions were still challenging in North America, where volume fell 4 percent and operating income fell 14 percent as higher aluminium prices and sweetener costs drove cost of sales per case up 7.5 percent.

But Goldman Sachs analyst Judy Hong, who had been expecting costs to rise 10 percent, said the lower inflation for raw materials did not seem sustainable, given that the company did not raise its full-year earnings forecast.

"We believe investors are unlikely to bid up the stock meaningfully on a (cost of goods sold) related upside, particularly if it is not viewed as sustainable," Hong wrote in a research note. Coke Enterprises stood by a forecast it gave in February for 2007 earnings per share to decline 5 to 10 percent.

Soaring demand from the ethanol industry has been sapping US corn supplies, sending corn prices to a 10-year high in late February. The market has since retreated as farmers make progress planting the 2007 corn crop, but prices remain higher than usual.

In Europe operating income rose 25 percent and volume rose 4 percent, helped by the launch of Coke Zero in France and the Netherlands.