Coca-Cola Co. (KO), the world's biggest soft-drink maker, on Tuesday reported a 28 percent drop in fourth-quarter profit on higher marketing costs and charges to repatriate foreign earnings.

But excluding one-time items, earnings beat the analysts' average forecast by 2 cents a share, helped by higher-than-expected revenue.

The Atlanta-based company, which rolled out a flurry of new products last year and plans to keep up the tempo in 2006, said operating income fell 6 percent on the planned double-digit increase in marketing and new product development.

Net earnings declined to $864 million, or 36 cents a share, from $1.2 billion, or 50 cents a share, a year earlier.

The 2005 net profit included charges of 10 cents per share for repatriating foreign earnings and for a charge incurred by a bottler in which Coca-Cola invests.

Excluding those charges, earnings were 46 cents a share. Analysts on average had expected 44 cents, according to Reuters Estimates.

Coca-Cola shares rose 1 percent to $41.33 on the Inet electronic brokerage system.

"Given low expectations heading into the quarter on concerns about the potential currency impact and volumes in key markets such as Europe and South Asia, Coke's Q4 result is a positive," analyst John Faucher of J.P. Morgan Securities, said in a research note. He rates the stock at "overweight."

Revenue rose 7 percent to $5.55 billion, reflecting a 4 percent increase in gallon sales, a 3 percent benefit from pricing and mix, and a 1 percent benefit from structural changes. Analysts had forecast $5.41 billion, according to Reuters Estimates.

The company, which recently named industry veteran Muhtar Kent to the newly created post of international operations president, posted a 4 percent rise in unit case volume, led by continued strong growth in key emerging markets, including China, Russia, Brazil and Turkey.

Reigniting anemic sales of core brands such as the flagship Coca-Cola Classic has been a challenge for Coca-Cola and its bottlers since the late 1990s, when many consumers started shifting to bottled waters and other healthy drinks.

At a December investor meeting, Coke announced a slew of innovations, along with a new marketing slogan that Chief Executive Neville Isdell said would help drive volume and profit growth.

On Tuesday, Isdell said that after completing a transition year in 2005, the company would measure itself against its long-term performance goals starting in 2006. It has said it targeted growth of 6 percent to 8 percent in operating earnings and 3 percent to 4 percent in unit volume.

"I think it's important that they are saying, 'Hold us to our long-term goals,' for the first time in 2006," said analyst Mark Swartzberg of Stifel, Nicolaus & Co.

At Monday's close, Coke shares were up 1.3 percent so far this year and traded at nearly 18 times 2006 earnings, while rival PepsiCo Inc. (PEP) was down 3.4 percent with a price-to-earnings ratio of 19.6.

But in terms of market value, Pepsi lags Coke after overtaking it late last year for the first time.