Despite the threat of recession, the largest bottler of Coke products Tuesday reported better-than-expected earnings and projected growth in 2008 thanks largely to an expanding lineup of non-carbonated beverages such as tea, fruit and enhanced water drinks.

Atlanta-based Coca-Cola Enterprises Inc. projected 2008 revenue growth of 4 percent to 5 percent and "high single-digit" growth for earnings per share. The board also approved a 17 percent increase in the annual dividend, to 28 cents per share.

"We recognize that economic trends have weakened in recent weeks, and that's particularly so in North America, but we remain committed to our guidance," CCE's chief executive, John Brock, said Tuesday in a conference call with analysts.

CCE was hurt by higher costs for aluminum and sweeteners, but helped by new beverages sold at higher prices.

Besides sticking to its forecast, the company reported strong results to close out 2007.

Fourth-quarter earnings were $158 million, reversing a $1.7 billion loss in the same period a year ago. Revenue rose 10.7 percent, to $5.3 billion. For the full year, net income was $711 million, compared to a $1.1 billion loss in 2006. Full-year revenue rose 5.7 percent to $20.9 billion. The 2006 results were pulled down by $1.8 billion in one-time charges, including a massive write-down on the estimated value of its franchise agreements.

In the past year, CCE working with the Coca-Cola Co., added Fuze fruit and tea beverages, Campbell Soup drinks, such as V8, and Glaceau brand beverages, which include Vitaminwater and Smartwater.

Coca-Cola Zero also has become a rising star in the carbonated soft drink segment. Coke Zero, a no-calorie soda wrapped in black packaging aimed at males, is part of a three-legged "Red-Black-Silver" strategy doing well for CCE, Brock said.

"It's really working in concert with the other two legs on the stool (Coca-Cola Classic and Diet Coke)," Brock said. "That threesome is powerful."

Excluding one-time items, CCE had earnings per share of 29 cents in the fourth quarter of 2007, beating analyst expectations of 27 cents, according to a survey of analysts by Thomson Financial.

Full-year earnings for 2007, excluding one-time chargers, were $1.39 a share, slightly above the $1.37 expected by analysts.

The market reacted favorably to the news. CCE stock rose 3.4% Tuesday to close at $24.28.

New York-based Stifel, Nicolaus & Co. raised its 2008 earnings per share estimate for CCE by 2 cents to $1.55, reaffirming its buy recommendations for both CCE and the Coca-Cola Co., which is scheduled to report earnings Wednesday.

"Drivers of the improving earnings trends are structural cost cuts, addition of high-margin, high-growth brands (e.g. Vitaminwater, Rockstar, Full Throttle) and improving Coke system capabilities and execution," Stifel Nicolaus analyst Mark Swartzberg wrote in a research note issued Tuesday.

CCE and the Coca-Cola Co., like many firms involved with low-cost consumer products, are often a haven for investors during recession, said Rich Smith, a senior analyst at the Motley Fool, a financial services firm in Alexandria, Va. Consumers might put off buying a high-price item such as a Cadillac, but they're not as likely to stop buying Coke, he said.

CCE, though, could be hurt if it is not able to keep prices high enough to offset the rising costs of raw materials, Smith said. Glaceau's enhanced water, for example, commands higher prices, but it also costs more in packaging because the average unit sizes are smaller, he said.

"The question in a slowing economy is how high, how fast can they raise prices when the consumer is being squeezed?" Smith asked. "At some point, consumers are just going to balk ... I have perfectly good tap in the sink. I'm just going to drink regular water."