Soft drink giant Coca-Cola Co. (KO), stung by a prolonged downturn in North America and other markets, announced on Thursday that it was lowering key long-term earnings and sales targets.

The move came just hours before Coca-Cola Chief Executive Neville Isdell (search) was scheduled to meet investors and financial analysts in New York for the first time since taking over the reins of the world's largest soft drink company on June 1.

Coca-Cola now expects annual earnings per share growth in the high single digits in percentage terms and annual unit case volume growth of between 3 percent and 4 percent over the long term. The new growth targets, however, do not apply to 2005.

The company's previous long-term targets were 11 percent to 12 percent EPS growth and 5 percent to 6 percent volume growth.

"We believe that once we take the necessary steps to get back on our path to growth, our company will be well positioned to reach these targets," Isdell said in a statement accompanying the announcement.

Coca-Cola had been under pressure from many Wall Street analysts to make its long-term outlook more realistic in light of the tough conditions facing the company in many of its more than 200 markets around the world.

It said on Thursday that it expected weakness to persist next year in North America, Germany, the Philippines and other big markets. A weak U.S. dollar and other currency changes are expected to have a slightly positive impact on 2005 results.

The earnings forecast for 2004 was left unchanged at a range of between $1.88 per share and $1.90 per share, including special items. Analysts on average expect a profit of $1.99 per share in the year, according to Reuters Research.

Total unit case volumes, a key sales measure in the beverage industry, are forecast to grow an anemic 1 percent to 2 percent in 2004, far below the high-single-digit volume growth the company once generated.

Coca-Cola's effort to realign its business came amid widespread skepticism that it was on track to reclaim its position as one of America's premier growth companies after five years in the market's dog house.

Shares of Coca-Cola have fallen 20 percent since Isdell succeeded Doug Daft and are 54 percent off their high of $88.94 set in July, 1998. They closed at $41.17 on Wednesday on the New York Stock Exchange.

Goldman Sachs analyst Marc Cohen, who has been covering the soft drink firm for almost two decades, said he has never seen investors so pessimistic about Coca-Cola's prospects over a five-year horizon.

"I think the expectations are quite dour," said Cohen, who has an outperform rating on Coca-Cola stock in the context of a neutral rating on the beverage sector.

Coca-Cola's performance has been particularly disappointing in North America, which accounts for about 30 percent of its total revenues and is often cited as the gauge of its financial health.

Economic weakness, poor weather and other factors beyond its control have contributed to the poor showing since 1999, but industry observers say mediocre marketing and a lack of innovative products are also to blame.

While the Dasani (search) bottled water, Minute Maid (search) juices and other non-carbonated products have delivered solid, sometimes spectacular growth, the company's flagship Coca-Cola brand has struggled since the late 1990s.

To help spur sales, Coca-Cola announced on Thursday that it was permanently increasing its annual marketing and innovation spending by $350 million to $400 million.

It said a major portion of the money would fund media campaigns for core brands and support emerging high-growth market opportunities as well as its innovation pipeline.