Pepsi Bottling profit tops view

NEW YORK (Reuters) - Pepsi Bottling Group Inc posted a better-than-expected quarterly profit on Tuesday as price increases helped offset volume declines, and it raised the low end of its full-year earnings outlook.

The largest bottler of PepsiCo Inc beverages said net income for the third quarter that ended September 6 was $231 million, or $1.06 per share. That is down from $260 million, or $1.12 per share, in the year-ago period, when profit included a gain of 14 cents per share.

Analysts on average were expecting $1.04 per share, according to Reuters Estimates.

Revenue rose 2.3 percent to $3.81 billion for the bottler, which operates in the United States, Canada, Greece, Mexico, Russia, Spain and Turkey.

The weak U.S. dollar, which boosts the value of international sales, contributed about 3 percentage points of growth to revenue and operating income, the company said.

Worldwide revenue per case rose 9 percent as the company was able to raise prices on its drinks.

Chief Executive Eric Foss said the combination of good execution, revenue and margin management and cost cuts helped to manage through challenging business conditions.

Pepsi Bottling, like other beverage companies, has had a difficult summer as consumers cut back on discretionary spending in the face of high gasoline prices and a weakening economy. This has led people to buy fewer soft drinks, especially the more impulse-driven purchases of cold drinks from gas stations and convenience stores.

Worldwide sales by volume fell 6 percent, driven by a 9 percent decline in Mexico and 6 percent declines in the United States and Canada as well as Europe.

The company said it now expects 2008 earnings per share to range from $2.32 to $2.38, compared with a prior forecast that called for $2.30 to $2.38 per share.

The company left its revenue target unchanged, saying it still expects revenue growth in the mid-single digits.

Analysts on average were expecting 2008 profit of $2.33 per share on revenue of $14.25 billion, according to Reuters Estimates.

Pepsi Bottling shares currently trade at 12 times earnings estimates for the current year, according to Reuters Estimates. That is a slight premium to rival Coca-Cola Co's largest bottler, Coca-Cola Enterprises Inc , which has a trading multiple of 11.6.

(Reporting by Martinne Geller, editing by Maureen Bavdek, Dave Zimmerman)

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