PepsiCo ( PEP) reported a 12% increase in second-quarter earnings Thursday, matching the Wall Street consensus, helped by 8% volume growth.

But the Pepsi-Cola and snack food distributor said full-year earnings could be below analysts' projections, which sent the company's shares down $1.46, or 2.7%, to $51.92.

The Purchase, N.Y.-based company earned $1.01 billion, or 61 cents a share, in the quarter ended June 12, compared with $944 million, or 54 cents a share, in the year-earlier period.

Revenue increased 8% to $7.07 billion. PepsiCo cited strong volume, particularly in its international division, favorable currency exchange and positive price/mix.

By division, sales at Frito Lay North America were $2.24 billion, up 4%; PepsiCo beverages posted a 9% increase to $2.13 billion, helped by sales of Gatorade; the international segment had a 13% rise in revenue to $2.4 billion; and Quaker had a 3% drop in sales to $303 million.

PepsiCo expects to earn at least $2.29 a share in 2004. That compares with the consensus estimate for $2.31 a share. The company earned $2.01 a share in 2003.