ATLANTA (Bloomberg) Coca-Cola Enterprises Inc., the world's largest soft-drink bottler, said profit fell 20 percent on a slump in North American soda sales and costs to cut jobs.

Net income declined to $270 million, or 56 cents a share, from $339 million, or 71 cents, a year ago when a tax gain added to profit, the company said yesterday in a statement.

North American shipments fell percent, the third straight decline, after the company raised soda prices to cover higher spending on sweetener and aluminium. The bottler cut 500 jobs to lower costs, part of plans to trim 3,500 positions. European volume rose on no-calorie Coca-Cola Zero and Capri Sun drinks.

Coca-Cola Enterprises is "taking the right steps in North America to revive growth," Kaumil Gajrawala, an analyst at UBS Securities LLC, wrote in a note.

The bottler raised its full-year profit forecast on favourable currency exchange rates. Sales rose 3.6 percent to $5.67 billion in the second quarter, driven by a two percent increase in European volume.

Analysts had estimated profit excluding some charges of 55 cents a share, the average of 12 projections compiled by Bloomberg. The company said it earned 58 cents, including three cents for legal and tax gains and excluding some items.

Restructuring costs were four cents a share in the second quarter, and currency exchange rates against the euro added two cents. Earnings a year earlier were helped by a 15-cent tax benefit from a change in how it accounted for acquisitions.

Shares of Coca-Cola Enterprises fell 31 cents, or 1.3 percent, to $23.27 at lunchtime in New York Stock Exchange composite trading yesterday. Before yesterday, they had gained 15 percent this year, compared with 14 percent for Pepsi Bottling Group Inc., the number two soda bottler.

Coca-Cola Enterprises, based in Atlanta, said it will earn $1.27 to $1.32 a share this year. The forecast includes a five-cent gain on favourable currency exchange rates and excludes one-time costs such as restructuring charges, the company said.

The company previously said profit would decline between five percent and 10 percent from $1.30 a year earlier, indicating a range of $1.17 to $1.24.

Coca-Cola Enterprises cut 500 jobs during the second quarter, some of them by not filling positions after employees left, said spokeswoman Laura Brightwell. The company has eliminated 1,000 jobs this year, she said.

Coca-Cola Enterprises announced plans to cut 3,500 jobs, or 4.8 percent of its workforce, in February. The restructuring, which will cost about $125 million for the year, was in response to lower demand for soft drinks and higher costs for raw materials such as aluminum and sweetener.

In North America, higher expenses for aluminium and sweetener contributed to a 9.5 percent increase in the cost of sales per case during the second quarter, prompting the bottler to raise its prices about 4.5 percent.

Shipments fell three percent in North America as volume gains in Coca-Cola Zero and Powerade sports drinks failed to erase declines in other sodas.

"Volume held up reasonably well in the face of accelerated pricing," Mark Swartzberg, an analyst at Stifel Nicolaus & Co., said in a note.

Chief Executive Officer John Brock is cutting costs in the US by making delivery routes more efficient and consolidating shipments into fewer large drop-offs on the peak grocery shopping days of Saturday and Sunday instead of several smaller drop offs during the week. Some customers are being switched to ordering drinks by telephone or online, instead of in person.

The bottler handles 80 percent of Coca-Cola Co.'s North American volume for bottles and cans.

"They still have some work to do in the States," said Pete Hastings, a fixed-income analyst at Morgan Keegan & Co., on July 23. The Memphis, Tennessee-based firm holds bonds of Coca-Cola Enterprises. "They've done nicely overseas, and new product additions are helping."