NEW YORK (CNN/Money) - When Coca-Cola reports its second-quarter earnings Thursday, Wall Street will be watching for early signs of whether the company's big gamble on diet colas over its sugary flagship Coke brand is a winner.

Coke (Research), the world's largest soft drinks maker, and its rival PepsiCo (Research) recently decided to shift the focus away from their full-calorie colas and instead put some big dollars and major advertising muscle behind the diet category in hopes of boosting sagging market share.

It may be too soon to tell if Coke has picked the right strategy. However, analysts agree that Coke does need to exploit other opportunities outside its core cola business, especially as more consumers replace colas in their shopping carts with water, juices and energy drinks.

Analysts expect Coke to earn 64 cents a share for its second quarter, flat with the same period a year ago. Revenue is expected to rise 6 percent to $6.3 billion, up from a 4 percent revenue growth in the first quarter.

Here's are four things that Wall Street wants to know more about.

Practically all Coke's management team is new.

"So it's hard to get a solid read this early in their job performance, but it benefits the company to have some stability in management," said Matthew Reilly, an analyst with Morningstar.

Under the leadership of Neville Isdell, who succeed former CEO Doug Daft in June 2004, Coke has made a number of management changes, including an operational overhaul of all of the company's global operations.

Wall Street has reacted by pushing up shares of the company about 3 percent year-to-date.

Said Reilly, "Isdell has said in recent conference calls that Pepsi has done a better job in management development than Coke. I'll be looking to see what next steps management is prepared to take going forward."

Coke's board, however, could use some turnover, he added. "There's still lots of gray hair there, probably too much. I'm not saying that Warren Buffet should go as well, but the average age could use some lowering."

According to industry publication Beverage Digest, the biggest challenge facing both Coke and Pepsi is slowing sales in North America -- as measured by unit case volume growth -- for the $65 billion carbonated soft drinks (CSD) industry.

John Sicher, editor of Beverage Digest, said CSD volume last year was up just 1 percent. "That is way below the growth rate of around 3 percent through most of the 1990s," Sicher said.

Atlanta-based Coke's overall volume fell 1 percent in 2004, while Pepsi managed a volume gain of 0.4 percent in the United States.

Separately, Coke saw its domestic market share drop by 0.9 percent to 43.1 percent last year while that for New York-based Pepsi slipped 0.1 percent to 31.7

Said Reilly, "Coke now is putting all its energy into increasing volume. The company realizes that they can't cost cut their way to prosperity, which was the strategy management adopted before Isdell took over."

According to Sicher, most of the 1 percent increase in volume last year came from sales of diet colas and to a lesser degree, energy drinks such as Red Bull, Monster and Rockstar.

Given that trend, Reilly said Coke's decision to expand its diet cola offerings -- introducing "Coke Zero" and "Diet Coke with Splenda" this spring -- is on the mark.

Sicher, agreed, even though he said sales data for diet colas indicate a slow start for the category so far this year.

Said Reilly, "It's still early in the game for Coke. Its products account for about 10 percent of worldwide volume for nonalcoholic beverages. However, Coke has not fully exploited this framework over the past few years, even with its vast distribution system. We believe energy drinks, water products and other noncola drinks is where there's real opportunity for Coke's future financial performance."

Doing well overseas is important for Coke, since its international markets account for about 68 percent of the company's total business.

Last quarter Coke saw a modest earnings gain thanks to strong results in overseas markets, including China, Russia and Brazil, which offset a 12 percent decline in unit case volume in Germany, where Coke faces stiffer competition for shelf space from store brands compared with other markets.

Robert van Brugge, analyst with Bernstein & Co., said he's keen to see Coke turn things around in Germany, since the country accounts for about 3 percent of the company's worldwide sales and about 6 percent of total operating profit.

With $7 billion in cash, Coke can certainly afford to go shopping for a few brands to expand its portfolio, said Morningstar's Reilly.

"I think it could potentially seek smaller companies in strategic markets to grow profits or some noncarbonated drinks companies in the U.S.," he said.

Beverage Digest's Sicher said he's aware of speculation surrounding Coke and Arizona.

"The antitrust laws would make it hard for Coke and Pepsi to buy more carbonated soft drinks brands," Sicher said.

Observers said Dean Foods, Ocean Spray and Glaceau are other brands that could falls on Coke's radar in the months ahead.

Click here to read more about Coke and Pepsi's calorie battle.