updated 4/25/2006 1:56:40 PM ET 2006-04-25T17:56:40

Nestle AG, the world's biggest food and drink company, said Tuesday its first-quarter revenue rose 14 percent to 22.8 billion Swiss francs ($17.9 billion) thanks in part to strong demand for its beverages.

Nestle, which makes Perrier water, Nestea iced tea and a variety of chocolate and pet-food products, said a stronger dollar improved its sales, which rose from an adjusted 20 billion francs in the year-earlier period. The rise in the dollar and other currencies against the franc accounted for 7.6 percent of the increase in sales, more than half the total revenue growth.

The organic growth rate, an important Nestle growth benchmark, stood at 6.7 percent, surpassing the company's target range of 5 percent to 6 percent. Organic sales comprise volume and price increases but not the effect of acquisitions or divestments.

The company, which reports earnings only for the half year and full year, said it has raised prices because input costs, mainly those of oil and raw materials such as coffee and sugar, have increased.

"Nestle had a strong start to the year," said Chief Executive and Chairman Peter Brabeck-Letmathe. "Our food and beverage business was once again the driver of our growth, with every region contributing."

The beverages division, which includes water and instant coffee, increased sales to 5.87 billion francs ($4.62 billion) from 5.08 billion francs.

U.S.-based eye-care company Alcon Inc., which is 75 percent owned by Nestle, was also one of the biggest sales drivers. Its revenue increased to 1.61 billion francs ($1.27 billion) from 1.36 billion francs.

Chocolate and confectionary, the weakest-growing division, increased sales to 2.66 billion francs ($2.09 billion) from 2.4 billion francs a year ago.

Nestle shares fell 0.7 percent to close at 381.25 francs ($300.02) on the Zurich exchange.

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