PepsiCo profit falls, but matches Street view

Profit fell to $719 million, or 46 cents per share in the fourth quarter, from $1.26 billion, or 77 cents per share a year ago.

Excluding items, the company earned 88 cents per share, in line with analysts' average estimate, according to Reuters Estimates.

Revenue rose 3 percent to $12.73 billion.

The stronger U.S. dollar reduced revenue growth by 5.5 percentage points and earnings by 5 cents per share, said the company, which makes Pepsi, Mountain Dew and Sierra Mist as well as Tropicana juice, Frito-Lay snacks and Quaker oatmeal.

Overall fourth-quarter volume rose 2 percent in the company's snack business and 1 percent in the drinks business.

Pepsi expects revenue and operating earnings to grow at a mid-to-high single digit rate in 2009, excluding the impact of currency exchange rates. It expects the stronger dollar to reduce full-year earnings by 8 percentage points.

The first half of the year and the current first quarter in particular will present the most difficult comparisons, Pepsi said, due to higher commodity costs and currency rates.

Given current market conditions, Pepsi said it does not anticipate selling shares of its anchor bottlers Pepsi Bottling Group Inc or PepsiAmericas Inc this year, though it expects to spend up to $2.5 billion buying back its own shares.

PEPSICO (PEP.NY)expects cost savings of more than $1.2 billion over the next three years, with $350 million to $400 million in 2009.

(Reporting by Martinne Geller; editing by Jeffrey Benkoe)