NEW YORK (Reuters) - Shares of Coca-Cola Co and its bottler Coca-Cola Enterprises Inc fell more than 4 percent each Thursday as better-than-expected quarterly profits were overshadowed by evidence the weakening U.S. economy is taking a toll.

Coca-Cola Enterprises, the largest bottler of Coke drinks, said the state of the economy and spiking commodity costs forced it to take a $5.3 billion impairment charge that hurt results at both companies.

Coca-Cola Co owns about 35 percent of the bottler, which also lowered its full-year earnings outlook and said it initiated a 120-day review of its North American operations in order to find actions that would improve results.

"Volume weakness in North America ... coupled with unprecedented increases in commodity costs, have created a situation that demands aggressive, immediate action," said John Brock, the bottler's chief executive.

The deteriorating U.S. economy is accelerating declines in sales volume of Coke's traditional soft drinks, which include Coca-Cola, Sprite and Fanta -- as well as bottled Dasani water -- the bottler said, adding that it is particularly true for higher-margin 20-ounce bottles, sold in refrigerated cases at convenience stores and gas stations.

Soaring gasoline prices have cut into convenience store traffic, analysts have said.

The world's largest soft-drink maker said overall sales by volume rose only 3 percent, down from 5 to 6 percent growth in each of the last four quarters.

Aside from the U.S. economy, Coke blamed labor strikes in France and Spain, unseasonable weather in Japan and Russia and the earthquake in China.

Muhtar Kent, who has been Coke's chief executive for less than 3 weeks, said international growth was "coming down" but "still expected to remain at a healthy level."

"There is a little disappointment that we're seeing slowing right now," said Edward Jones analyst Jack Russo.

Coca-Cola said net income fell to $1.42 billion, or 61 cents per share, in the second quarter, ended June 27, from $1.85 billion, or 80 cents per share, a year earlier.

Excluding its share of the bottler's impairment charge, Coke said it earned $1.01 per share, which handily topped analysts' average estimate for 96 cents, according to Reuters Estimates.

Net operating revenue for the quarter rose 17 percent to $9.05 billion.

BOOST FROM WEAK DOLLAR

Coca-Cola, which derives about 70 percent of its revenue from outside North America, said 9 percentage points of the revenue increase was due to the weak dollar, which boosts the value of international sales when they are converted to dollars for inclusion in the company's financial statements.

The revenue rise included 3 percentage points from higher sales of drink concentrate, 2 points from bottler acquisitions, and 3 points from higher prices and more sales of higher-priced products.

Unit case volume rose 5 percent in markets abroad, driven by strength in markets, including India and the Middle East. Volume was flat in North America and fell 1 percent in Japan and the European Union.

The company said it is targeting $400 million to $500 million in annual cost-savings by the end of 2011.

Many analysts, including Morgan Stanley's William Pecoriello, recommend buying Coke shares, especially since they have fallen 17.6 percent since the start of the year.

"At the current valuation, Coke is trading at a price-to- earnings ratio not seen since 1989 on earnings estimates we see going up," said Pecoriello in a note.

He has an "equal-rate" rating on Coke Enterprises, saying he expects continued pressure on the shares, which have fallen 37 percent this year.

Coke shares were down $2.34, or 4.5 percent, at $50 in afternoon trading on the New York Stock Exchange, while Coke Enterprises shares were down 29 cents, or 1.7 percent, at $16.55. (Reporting by Martinne Geller; Editing by Brian Moss and Andre Grenon)