Corrects last paragraph to show volume increase is in food business, not overall company

PepsiCo Inc posted a better-than-expected quarterly profit, but its revenue fell short of Wall Street expectations, hurt by ongoing weakness in its Americas beverage business.

PepsiCo, which just bought its North American bottlers, said it was boosting investment in innovation, research and development and infrastructure in the current quarter -- moves it said should help accelerate growth in the second half of the year.

Still, the maker of Pepsi-Cola and Frito-Lay snacks affirmed its profit target, which calls for earnings per share to grow 11 percent to 13 percent in 2010, excluding currency fluctuations.

In the first quarter that ended on March 20, net income was $1.43 billion, or 89 cents per share, up from $1.14 billion, or 72 cents per share, a year earlier.

Excluding items such as a one-time gain on previously held equity interests, merger charges and the impact of Venezuela's currency devaluation, earnings were 76 cents per share.

Analysts on average were expecting earnings of 75 cents per share, according to Thomson Reuters I/B/E/S.

Revenue rose 13 percent to $9.37 billion, but fell short of analysts' estimates, which called for $9.57 billion.

Archrival Coca-Cola Co also reported disappointing quarterly revenue earlier this week.

PepsiCo just acquired its largest bottlers for $7.8 billion in a bid for more control over the distribution of its drinks in North America. Aside from giving it more flexibility and speed in developing new products, Pepsi sees the deal resulting in $400 million of cost savings.

Coke is doing a similar deal, but it is not expected to close until the fourth quarter, giving Pepsi a head start of six months or more.

PepsiCo said sales by volume rose 1 percent in its food business, as strong snack sales in markets such as India and China offset a decline in Europe.

(Reporting by Martinne Geller; Editing by Lisa Von Ahn, Maureen Bavdek, Dave Zimmerman)

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