NEW YORK (CNN/Money) - Coca-Cola Co. said Tuesday its net income fell in the first quarter, as the world's largest soft drink maker, is in the midst of restructuring its worldwide operations and revamping its marketing strategy, continued to struggle with weak North America sales.

Excluding one-time charges and gains mostly related to tax gains, Atlanta-based Coke reported improved earnings per share.

Coke (Research) shares rose in morning trading on the New York Stock Exchange.

For the quarter, the company earned $1.1 billion, or 47 cents a share. Coke earned about $1.1 billion in the year-earlier period, but that was only 46 cents a share because of more shares outstanding in the prior-year quarter.

Analysts had forecast a profit of 43 cents a share, according to earnings tracker First Call.

Including special items, the company's net income fell to $1 billion, or 42 cents a share, down from $1.1 billion, or 46 cents, a share a year earlier.

Revenue increased to $5.27 billion, up 4 percent from $5.08 billion in the same period a year earlier, and beating analysts' forecasts of $5.17 billion. Coca-Cola also announced plans to repurchase $2 billion shares of stock during 2005.

The company was scheduled to hold its annual shareholder meeting last Tuesday.

Coca-Cola's best sales performance last quarter, as measured by unit case volume growth, was clearly in its international markets, including double-digit percentage growth in both China and Brazil. Unit case volume grew 7 percent in Argentina and 12 percent in South Africa.

However, total volume growth was flat in North America, the company's largest and most vital market. According to the company, the decline in carbonated soft drink case volume in the market was offset in part by strong growth in diet, water and juice offerings.

Coke Chairman and CEO Neville Isdell told analysts in a conference call that he believes the stepped up investment the company's making to reignite its flagship brands will start to yield positive results this year.

"I believe that we are at the end of the beginning [of the changes we've implemented]. But rebuilding brand equity takes time. There are no quick fixes," Isdell said.

One of its biggest concerns confronting Coke is sluggish soft drink sales in the United States. Coke's domestic market share fell 0.9 percent to 43.1 percent last year while that of rival PepsiCo (Research) declined by 0.1 percent to 31.7 percent, according to industry trade publication Beverage Digest.

Overall, U.S. carbonated soft drink volume grew only 1 percent in 2004, driven by diet carbonated soft drinks and energy drinks.

John Sicher, editor and publisher of Beverage Digest, said he expects both Coke and Pepsi to put more marketing muscle behind the diet category going forward.

"We estimate that the diet category could actually surpass the regular soda category in about 12 to 15 years," Sicher said.

Both companies have added new diet drinks sweetened with sugar substitute Splenda this year. Coke will debut Coca-Cola Zero this June, while Pepsi re-introduced Pepsi One last month.

Coke's other beverage rollouts this year include a lime-flavored version of the flagship Coca-Cola brand and an energy drink called Full Throttle.

Said Isdell, "We're looking at where we are most profitable and then expand our offerings there."

Since coming aboard in June 2004, Isdell has indicated his eagerness to shake things up at the company in an effort to improve results.

Last month, Isdell announced an operational overhaul of all of the company's global operations. The most noteworthy change was the creation of a new position to oversee Coke's its global marketing and advertising strategy, headed by Mary Minnick, president of Coca-Cola Asia for the past four years and a 21-year veteran of the company.

Minnick told analysts during the conference call Tuesday that although she has not yet formally assumed her new responsibility, she already has a gameplan in place to jumpstart a more focused integrated marketing effort based on innovation and creative thinking.

Said Minnick, "We have no shortage of ideas, but we had a shortage of focus and we have been a bit risk averse. I think we can do a better job of leveraging ideas that we know have worked in our other markets and implement them elsewhere."

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