NEW YORK — PepsiCo.'s third-quarter net income rose 12 percent on strong sales gains in drinks and Frito-Lay snacks abroad, but shares fell after the company lowered the top end of its guidance because of investments to expand its presence overseas.
Shares fell $2.46, or 3.6 percent, to $65.65 in heavy volume this morning.
The company also said it expects to be hurt by changes in currency exchange rates, which happens to businesses with interests abroad.
Pepsi has been expanding in growing markets such as China and India to hook shoppers as they get more money. The moves help bolster weaker performance in developed regions like the U.S. and Western Europe, where people are limiting their spending in down economies.
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The stock fell today because short-term investors aren't pleased with the increased spending, which could weaken results, said Jim Tierney, chief investment officer at W.P. Stewart, an investment management firm in New York.
But long-term investors are pleased.
"It really is the battle between short-term thinking and long-term thinking," he said. "If you think long-term about this, you're happy they are continuing to invest in the future."
Pepsi earned $1.92 billion, or $1.19 per share, in the three months ending Sept. 4. That compares with earnings of $1.72 billion, or $1.09 per share, in the same period last year.
Without one-time items including charges to integrate its bottlers, the company earned $1.22 per share, in line with analyst estimates, according to Thomson Reuters.