* Q1 EPS 27 cents ex-items vs Wall St view 22 cents
* Revenue falls 1.5 pct
* Raises 2010 earnings forecast
* Shares up 1.5 percent (Adds analyst comment, stock activity, byline)
By Brad Dorfman
CHICAGO, April 27 (Reuters) - Coca-Cola Enterprises Inc CCE.N, the largest bottler of Coca-Cola Co (KO.N) beverages, reported a higher-than-expected quarterly profit and raised its full-year forecast, helped by growth in European markets.
Coca-Cola Enterprises (CCE) is gearing up to sell its North American operations to Coca-Cola, its largest shareholder and supplier, following a similar move by PepsiCo Inc (PEP.N). [ID:nN25236905] The deal is on track to close in the fourth quarter, CCE said on Tuesday.
That will leave the company solely focused on Europe, with assets in countries including Britain, France and Belgium. As part of the deal, expected to close in the fourth quarter, CCE will buy Coke's bottling operations in Norway and Sweden. [ID:nN22110832]
During the first quarter, CCE said price increases and sales volume growth both helped boost profits in Europe.
"Pricing is much stronger in Europe," Morningstar analyst Phil Gorham said. "The price gap over Pepsi is wider" than in the United States, which helps boost margins.
"We've not seen the migration toward health and wellness products (in Europe) and that's in part because (carbonated) drinks weren't quite as popular over there as they were here in the first place," he said.
In North America, the weak economy and a growing health consciousness has cut into sales of soft drinks. To reignite sales, the company is expanding its placement of "Boost Zones," where red banners and prominent signs help drive sales of higher-margin products such as chilled drinks.
Coke Enterprises' net income rose to $106 million, or 21 cents per share in the first quarter, compared with $61 million, or 13 cents per share, a year earlier.
Excluding one-time items, earnings were 27 cents a share, above the 22 cents forecast by analysts, according to Thomson Reuters I/B/E/S.
Revenue fell 1.5 percent to $4.97 billion, below the $5.08 billion expected by Wall Street.
Coke Enterprises buys syrup concentrate from Coca-Cola Co and bottles and distributes drinks including Coca-Cola, Sprite, Dasani water and Powerade.
Sales by volume fell 4 percent. Volume rose 1.5 percent in Europe and fell 2.5 percent in North America.
The company said it now expects 2010 comparable earnings per share to rise 10 percent, excluding currency, up from the high-single-digit percentage increase it forecast in February.
The company currently expects currency fluctuations to cut 2 cents a share from 2010 earnings, but added that it is too early to accurately predict the impact of currency.
It also stood by its forecast for low-single-digit growth in revenue, aided by mid-single-digit growth in Europe.
CCE shares were up 1.5 percent, or 43 cents, at $28.58 in morning New York Stock Exchange trading. (Additional reporting by Martinne Geller, editing by Dave Zimmerman and Maureen Bavdek)