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Pepsi Bottling Earnings Rise

Shares fall after the company's guidance disappoints.

Shares of

Pepsi Bottling Group


dropped in early trading Tuesday after the distributor of Pepsi products posted in-line third-quarter earnings but issued a full-year earnings guidance below expectations.

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For the period ended Sept. 9, Pepsi Bottling earned $207 million, or 86 cents a share, including a gain of 5 cents a share related to income tax law changes. Analysts polled by Thomson First Call expected earnings of 81 cents a share.

During the year-earlier period, the company earned $205 million, or 82 cents a share, including a gain of 4 cents a share tied to a legal settlement.

Pepsi Bottling's revenue rose to $3.46 billion from $3.21 billion a year earlier. Analysts, on average, predicted revenue of $3.41 billion. The company's worldwide physical case volume increased 2%.

Looking ahead, Pepsi Bottling forecast adjusted full-year earnings of $1.85 to $1.88 a share. The projected range was narrowed toward the high end of the company's earlier forecast of $1.82 to $1.88 a share, but the forecast is below analysts' average estimate of $1.90 a share.

After the report, Deutsche Bank downgraded Pepsi Bottling's stock to hold from buy. Shares recently were down $1.76, or 5%, to $33.47.