The shock announcement sent Wall Street stocks tumbling amid fears that other large companies may be forced to issue similar gloomy trading statements.

Coca-Cola said earnings had been seriously affected by the strong dollar and weaker than expected volume due to a collapse in demand around the world.

Volatile markets

It warned that some of its major markets around the world including Asia, Brazil, Japan, Russia, remained volatile. These regions have borne the brunt of the recent global financial turmoil.

Blaming the global economic slump, the company said it expected to report earnings of 24 cents or 25 cents a share for the quarter.

Wall Street analysts had forecast a figure of 30 cents a share.

Chief financial officer James Chestnut said: "in several key markets that have been impacted by economic uncertainty and volatility, along with structural changes within the Coca-Cola system, volume and financial contributions have been weaker than anticipated, affecting operating income and leading to equity losses in some cases."

Shares in the company fell almost 5% following the warning.

The slump in the share price dragged down the Dow Jones Industrial Average of leading US shares.

Cadbury deal

Earlier, Coca-Cola announced a $1.85bn deal with British drinks conglomerate Cadbury Schweppes to acquire all of Cadbury's non-US soft drinks brands.

The brands include Canada Dry, Dr Pepper, Schweppes and Crush.