Earnings per share came to 50 cents, up from 35 cents and 10 cents better than market expectations. The company's sales volumes worldwide increased five per cent in the july-september period.

Total sales increased to $5.54 billion from $5.36 billion in third quarter 1997.

"A little over two years ago, we began a programme to re-invent and re-invigorate pepsico as a powerhouse packaged goods company," said chairman and chief executive Roger Enrico.

"The key elements of our strategy were to invest vigorously to rebuild momentum in our soft drink business, to leverage the strength of Frito-Lay (Pepsico's snack food unit) in the United States and capitalise on its great potential internationally."

But Enrico also cited concern over an unexpected slowdown in recent volume growth at Frito-Lay in the United States as well as global economicweakness.

"We have already taken steps to improve the situation at Frito-Lay but we expect the international environment to become more difficult for our operations in the near term," he said.