Updated from 11:17 a.m. EDT

Coca-Cola

(KO) - Get Report

reported slightly lower second-quarter earnings Wednesday, but the beverage giant exceeded Wall Street's forecasts on an operating basis with the benefit of early savings from restructuring.

Investors welcomed the news, and shares of Coca-Cola closed up 2 5/16, or 4%, to 60 1/2.

And Coca-Cola, which once repurchased shares almost regularly, but has had no buybacks for two years, said in a conference call that the company would now consider share repurchases.

Any share repurchase would likely occur, "probably later toward the end of this year, all related around the rating agencies," said chief financial officer Gary Fayard.

For the quarter ended June 30, Coca-Cola posted net income of $926 million, or 37 cents a diluted share, down almost 2% from $942 million, or 38 cents a share, in the comparable period a year earlier.

But excluding one-time charges related to the restructuring, the Atlanta-based conglomerate reported earnings of 44 cents a diluted share, including a penny a share from the early restructuring savings.

Coca-Cola was expected to earn 41 cents a share, according to the consensus estimate of analysts polled by

First Call/Thomson Financial

.

Revenue rose 5% to $5.6 billion from $5.3 billion in the second quarter of 1999.

"We are beginning to see the benefits from the large-scale reshaping that we started several months ago," Douglas N. Daft, Coca-Cola's chairman and chief executive, said in a statement.

During the quarter, Coca-Cola restructured its operations and cut more than 5,000 workers in the process, and the company will shed 200 more jobs from its worldwide work force by the end of the year and spend $725 million before taxes to cover costs of the cuts.

The realignment accompanies company-wide moves to make Coca-Cola more responsive to customers in its roughly 200 markets around the world. In a conference call Wednesday, Daft reiterated the company's commitment to its "think local, act local" marketing strategy and to strengthening its relationship with its bottlers worldwide.

"Our goal is for the Coca-Cola company to become the world's premier relationship company," said Daft. ''The result is going to be a deeper relationship with people as individuals, and this in turn will translate into strong, healthy, sustainable, predictable volume and profit growth. "

Although the strategy yielded strong results in the Asia Pacific, European and Latin American markets during the quarter, Coca-Cola executives noted that volume growth in North America was, at 1%, lower than expected due to a difficult pricing situation.

Coca-Cola said sluggish sales in supermarkets reflected the impact of the company's decision to raise the prices it charges bottlers for the concentrate to make soft drinks. Concentrate price hikes generally translate into higher soft drink prices for consumers. While Coca-Cola's price hike increased profit for retailers and bottlers who in turn raised prices more than 5%, it restricted volume growth, said Jack Stahl, Coca-Cola's president and chief operating officer. Stahl called the increases a necessary step that gave Coca-Cola, its bottlers and its retailers a "stronger platform" to compete.

Mark Greenberg, an analyst with

PaineWebber

, dismissed complaints about slow volume growth in North America, saying slow growth is a given in the U.S. "For me it's always been about global growth. You've got to get your global markets to grow faster. You've got to blow it out in China and India, Germany and Mexico. And that's what

Coca-Cola did this quarter. That's why it's exciting," Greeberg added.

Worldwide shipments of unit cases increased 7% worldwide, the company said, while gallon shipments increased 4%. The

Schweppes

brands, acquired in 1999, contributed approximately 1.5 percentage points of growth.

Volume swelled 18% in India and 16% in China, and sales results likewise improved in Latin America and the Asia-Pacific region. Conversely, a difficult political and economic environment in many parts of Africa pinned volume growth in the Africa-Middle East region.

In Europe and Eurasia, volume increased 13% on a reported basis and 11% on a comparable basis, showing recovery from last year¿s second quarter, when the Coca-Cola was hit by a widespread contamination scare in Europe after students in Belgium and France became ill from Coca-Cola classic. For the second quarter this year, sales rebounded: 9% in Germany, 7% in Spain and 14% in central European countries.

However, weakness in the euro had about a 3% negative impact on earnings for the quarter. CFO Fayard said although the euro has been weaker than expected this year, the company doesn't expect to lower its earnings forecast for the year because of softness in the currency.

In a statement, the company said it remained comfortable with its projected earnings of $1.44 a share this year and $1.76 a share next year. It said it expected restructuring savings for 2000 to total about $150 million before taxes. Once the restructuring is complete, Coca-Cola expects annual expense reductions of $300 million beginning in 2001.