Coca Cola has a 50% market share in Europe

The Atlanta, Georgia firm said it earned $1.72bn in the three months to the end of June, compared to $1.58bn in the same period a year ago.

The world's largest soft drinks company had seen profits fall in the first quarter as North America sales slowed.

But chairman and CEO Neville Isdell said 2005 remained "a transition year".

He also said Coke was addressing poor performance in a number of important markets, including India and the Philippines.

'Work ahead'

Revenue in the quarter was $6.3bn, up 7% from the $5.91bn recorded in the same quarter in 2004.

But Mr Isdell said: "We still have considerable work ahead of us in the US, and in markets like Germany, the Philippines and, in particular, India, as well as to improve our performance in the areas of innovation and marketing."

Last month Coca-Cola formally agreed to change its sales practices in Europe after an EU investigation found that its business methods stifled competition.

Agreements with shops and bars to stock Coke drinks exclusively will now end as will its practice of giving stores rebates for hitting sales targets.

The European Commission said the legally binding agreement would give consumers more choice of fizzy drinks.

The deal, first outlined in October, followed a six-year competition probe. Coke has about a 50% share of the European soft drinks market.