Coca-Cola Co. (KO) on Thursday reported a 24 percent drop in third-quarter net income due to weak sales of its soft drinks, juices and bottled waters in Germany (search), North America and other key markets.

The world's largest soft drink maker, led by a new chief executive and a restructured management team, blamed a variety of factors, including poor weather in North America and regulatory changes in Europe (search), for the disappointing showing.

When one-time charges were excluded, Coca-Cola's (search) earnings were above what analysts had been told to expect in September when the Atlanta-based company surprised Wall Street with a sober profit warning.

"There were no big surprises. They clearly have a lot of work to do," said Manny Goldman, a San Francisco-based beverage consultant who has followed the soft drink maker for more than three decades.

In a conference call shortly after the release of the results, Coca-Cola executives said they expected business in many of the company's more than 200 markets around the world to be challenging in the fourth quarter.

Coca-Cola expects to earn between $1.88 per share and $1.90 per share in 2004, within the range it gave last month.

"I'm not pleased with the results this quarter as I believe they are symptoms of key issues our company needs to address," Coca-Cola Chief Executive Neville Isdell told analysts.

In the three months ended Sept. 30, Coca-Cola earned $935 million, or 39 cents a share, which included 11 cents per share in noncash charges related to a new deposit law and tax matters in Germany.

That compared with a profit of $1.22 billion, or 50 cents a share, in the same period in 2003. Third-quarter revenue dipped to $5.66 billion from $5.67 billion.

Analysts, who sharply cut their earnings forecasts after the recent profit warning, had on average expected earnings of 47 cents a share on sales of $5.65 billion, according to Reuters Estimates, a unit of Reuters Group Plc.

Despite beating Wall Street's revised forecast, Coca-Cola admitted that it was disappointed by anemic 1-percent growth in its unit case sales, a key measure of financial health in the beverage sector.

Volumes fell 3 percent in North America, which accounts for about 30 percent of the company's total revenue, and by the same amount in Europe. The drop in European volumes was sparked by a 16-percent decline in Germany.

German discount stores are selling more private-label drinks in compliance with a new law that encourages the use of returnable bottles.

In addition to citing the negative impact of poor weather in parts of North America and Northern Europe, Coca-Cola said its sales were hurt by higher wholesale and retail drink prices in North America.

Asia, where volumes grew 9 percent, was one of the few bright spots for the company. Continued growth in the region was driven by a 20-percent volume surge in China.

Coca-Cola also benefited from a weak dollar and other currency fluctuations, which added 6 percent to operating income in the period. A falling dollar improves financial results when overseas earnings are converted into dollars.

But Gary Fayard, the company's chief financial officer, told analysts he expected the currency benefit would be "substantially less" in the fourth quarter of 2004 than in previous quarters.

Fayard also said the company expected to repurchase at least $2 billion worth of its stock in 2004.

Coca-Cola shares rose 13 cents to $39.61 in after-hours trade on INET, after closing up 3 cents at $39.48 on the NYSE.