(Updates with details from earnings call in paragraphs 2 and 9, analyst comment in paragraph 5, context in paragraphs 1 and 3)

MEXICO CITY, July 21 (Reuters) - Mexican bottler Arca Continental on Friday posted a second quarter net profit that was up 11% as the company shifted more volumes across Latin America and benefited from a strategy of price hikes it has used to offset raw material costs.

Costs of raw materials, particularly for aluminum and PET plastic, should ease in the second half of this year, executives said in an earnings call, adding Arca's pricing in the United States "is obviously going to be more moderate."

Arca, which sells water and soft drinks, makes the bulk of its sales in Mexico and the United States, though it also operates across Peru, Ecuador, and Argentina.

The group posted a profit of 4.69 billion pesos ($274 million) over April through June, from revenues 5% higher at 56.05 billion pesos.

"A key management agenda is balancing cost relief versus potential price elasticity among U.S. and Mexico consumers," analysts at Citi said, pointing also to Mexico's surging peso which boosted Arca's capacity to spend on dollar-denominated raw materials, whose prices rose some 2% over the quarter.

The Mexican peso appreciated nearly 15% against the U.S. dollar over the last year. Arca said sales would have risen 13.6% on a currency-neutral basis.

The bottler has increased prices across its regions and in Mexico, its largest market, average prices per unit case rose nearly 10%. In the United States, where net prices rose 14.3%, volumes dropped 2.3% causing sales to dip 1.4%.

Arca's core earnings rose 8.4% to 11.31 billion pesos over the quarter, Arca said, and capital expenditures totaled around 34% of the $800 million Arca had said it planned to spend for the year.

Arca, which had forecast full-year sales growth in the single digits in February, said its outlook was now more upbeat than earlier in the year. ($1 = 17.1156 pesos at end-June) (Reporting by Noe Torres, Kylie Madry and Aida Pelaez Fernandez; Writing by Sarah Morland; Editing by Miral Fahmy and Chris Reese)