Pepsi Bottling Group Inc reported better-than-expected quarterly profit on Tuesday due to higher prices and continued cost savings, and raised its full-year outlook, sending its shares up more than 4 percent to an all-time high.

The largest bottler of PepsiCo Inc drinks said net income for the third quarter, which ended September 8, rose 26 percent to $260 million, or $1.12 per share, from $207 million, or 86 cents per share, a year ago.

Excluding restructuring charges and an after-tax gain of $31 million, the company earned 99 cents per share. Analysts on average had been expecting 89 cents per share, according to Reuters Estimates.

Operating income was also aided by currency fluctuations, the company said.

Quarterly net revenue rose about 8 percent to $3.73 billion, as price increases in all markets led worldwide revenue per case to grow 7 percent.

The impact of higher prices for commodities such as aluminum for cans and corn for sweetener were offset by the price increases.

Total worldwide case volume was up 1 percent, as a 4 percent gain in Europe, driven by a 16 percent increase in Russia, was balanced by a decline in Mexico and flat volume in the United States.

Several analysts said the earnings beat was mostly due to controlling expenses and that sales by volume, especially in the United States and Mexico, were below their expectations, a fact that tempered investors' enthusiasm following large early gains in the shares.

Pepsi Bottling's shares were up $1.02, or 2.7 percent, at $38.21 in midday New York Stock Exchange trading, after touching an earlier all-time high of $38.93.

Pepsi Bottling also said it plans to dispose of some of its full-service vending equipment due to changing customer demands, and in turn will record a pretax charge of $40 million to $50 million. About 5 cents to 8 cents per share of it will be recognized in the fourth quarter.

The program will be finished by the second quarter of 2008.

The company said it expects to earn $2.15 to $2.18 per share for the full year, excluding items, up from its prior guidance of $2.02 to $2.07 per share.