ATLANTA (

TheStreet

) --

Coca-Cola

(KO) - Get Coca-Cola Company Report

grew earnings by 18% last quarter but results came in a penny short of analysts' expectations.

Coca-Cola's results were boosted by volume growth in each of its major markets, with 6% worldwide volume growth. The strongest markets included Russia, Turkey, Mexico and India.

>> 15 Food Stocks Hit by Commodity Inflation

Standard & Poor's beverage analyst Esther Kwon reiterated a strong buy rating on Coca-Cola shares despite the earnings miss.

Kwon said that, "excluding new brands, 5% worldwide volume growth was impressive, with North American volumes up 2%."

>> Coca-Cola Recipe Revealed

The beverage giant earned $1.9 billion, or 82 cents per share, up from $1.61 billion, or 69 cents per share, in the

year-earlier period. Adjusted for one-time items including restructuring charges related to the integration of bottler

Coca-Cola Enterprises

'

(CCE)

North American operations, Coca-Cola would have earned 86 cents per share, a penny below expectations.

Revenue jumped 39.7% to $10.52 billion, below analysts' consensus for top-line sales of $10.54 billion.

Vote: Do You Drink Diet Coke or Pepsi?

Coca-Cola's stock traded 1.2% lower Tuesday afternoon. More than 13 million shares changed hands with less than an hour left in the trading session, compared with their average daily volume of just 8.5 million.

Investors looked to Coca-Cola's report for word on whether on the

Dow Jones Industrial Average

component's financial performance had been pressured by rising commodity and raw material costs.

Reported cost of goods sold was up 55% in the quarter to $3.95 billion, or 37.5% of total revenue. In the year-earlier period, cost of goods sold was $2.54 billion, or 33.7% of total revenue.

S&P's Kwon noted that Coca-Cola's "commodity outlook is somewhat worse, but forex should add to income growth.

"Japan's disruption and marketing are estimated as Q1 $0.01 negative impacts each," she added.

Kwon raised her 2011 earnings-per-share expectations for Coca-Cola by 12 cents to $3.94, and increased her price target on the stock by $2 to $75.

In late March

Dr Pepper Snapple

(DPS)

said that costs for plastic bottles and fuel to transport beverages had been rising as oil prices marched higher.

Oil prices affect the price of polyethylene terephthalate, or PET, the plastic used by beverage companies to make soda bottles. Coca-Cola, and others, like Dr Pepper Snapple and

PepsiCo

(PEP) - Get PepsiCo, Inc. Report

, cannot hedge the prices they pay for PET because the material is not traded like other commodities.

Vote: Do You Drink Diet Coke or Pepsi?

Dr Pepper Snapple said it would raise prices and implement other cost savings initiatives in an effort to offset higher costs, and market watchers will pay close attention to whether Coca-Cola PepsiCo, which reports its earnings on Thursday, will employ similar cost-saving measures.

In February

PepsiCo cut its 2011 profit guidance as rising commodity costs ate into its bottom line.

Vote: Do You Drink Diet Coke or Pepsi?

A roster of companies from

McDonald's

TheStreet Recommends

(MCD) - Get McDonald's Corporation (MCD) Report

and

Hasbro

(HAS) - Get Hasbro, Inc. (HAS) Report

to

Hershey

(HSY) - Get Hershey Company (HSY) Report

,

Kraft Foods

(KFT)

and

Starbucks

(SBUX) - Get Starbucks Corporation Report

have reported in recent months that

rising commodity costs are eating into their bottom lines.

In early March,

Coca-Cola exercised its right to acquire the remaining portion of Honest Tea.

Coca-Cola purchased a minority stake in the organic bottled tea company three years ago through its Venturing and Emerging Brands unit of Coca-Cola North America. The March announcement marked the completion of that transaction.

In October of last year

Coca-Cola bought out

Coca-Cola Enterprises

(CCE)

, its core bottler, in a $3.4 billion acquisition.

The acquisition helped Coca-Cola book gains in recent quarter, just as a similar transaction in which PepsiCo acquired two of its bottlers helped its results last quarter as well.

-- Written by Miriam Marcus Reimer in New York.

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Miriam Reimer

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