When you think about it, corporations are no different than consumers. They see the economic writing on the wall, and they react to it accordingly. So it was no surprise when PepsiCo's (NYSE: PEP) CEO Indra Nooyi said she was down on beverage acquisitions in North America. Instead, she'd like to drive profits in an organic fashion. In my opinion, she's basically saying that she doesn't feel that the economy has hit a bottom yet and that she's got time to look around for prospects to add to her company's portfolio.

I think she's probably correct (if she actually is thinking along those lines), but I would add that, if a particularly compelling prospect came along, I wouldn't necessarily reject it in knee-jerk fashion just because the economy is one scary beast. Remember that PepsiCo, or any company for that matter, can buy other businesses for cheap valuations at the moment. Of course, those other businesses know that, and probably are holding off from putting themselves up on the block. So I do realize that being a value buyer in this climate is more complex than it appears to be at first glance.

She's also on the right track in terms of concentrating on growing internally. I don't think companies focus as much as they should on internal growth. As Nooyi pointed out, organic innovation can indeed be the more attractive economic alternative to pricey buyouts.

PepsiCo (NYSE: PEP), major rival of Coca-Cola (NYSE: KO), is letting the investing world know that it's doing fine. In one of the shortest press releases I've ever read, management at the beverage maker let shareholders in on the fact that it intends to reiterate guidance at The Deutsche Bank Global Consumer and Food Retail Conference that takes place next week in Paris. PepsiCo believes it's still good for $3.72 per share in earnings for the fiscal year.

When the world seems to be heading for the dark pits of economic hell, it's nice to know that PepsiCo expects to be able to stay the course and deliver on an earlier forecast. After all, with all this talk of inflation, one would have to wonder how companies like PepsiCo and Coke can possibly remain stable given the difficult input-cost environment. The big question on my mind is how high these two companies might rise during the summer, since they are considered defensive plays. They didn't seem defensive at all on Wednesday during the Dow's 200-point bleed, but my gut is telling me they might be good short-term plays.

They certainly are excellent long-term plays, and while I own Coke, I'll concede that right now, in terms of P/E ratios and dividend yields, an investor wouldn't go wrong with either. And, yes, I'll further concede that one gets an added bonus with PepsiCo since it owns the strong Frito-Lay salty-snack business. But with both stocks down over the last six months (As of this writing, PepsiCo is down more than 11% for the six-month period while Coke is down more than 9%), and with problems in the markets, they might be interesting ideas right now. Again, though, the effect of input costs must be part of your due diligence before buying.

Disclosure: I own shares of Coke; positions can change at any time.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

Behold the humble potato chip, snack food of the ages. Claimed to have been invented in 1853 in the road house kitchen of Native American George Crum, the potato chip traveled through American snack history in a class of it's own. That is, until in the early 1960s, when it was discovered that you could grind potatoes into a slurry and then press them back into a consumable form.

I sat down one day with a bag of potato chips from Lay's and with a can of Pringles. Lay's are made by Frito-Lay, a property of PepsiCo Inc. ( NYSE: PEP). Pringles are made by Procter & Gamble Co. (NYSE: PG). I wanted to compare the two in order to assess their similarities and differences. What I found were two very different snacking sensations although both are derived from the same source. The Lay's ingredient list is simple. They're made with potatoes, oil, and salt, with no preservatives added. The Pringles ingredient list begins with the same potatoes, oil, and salt, but the product also contains at least traces of wheat starch and rice flour in addition to a couple common food chemicals.

Perennial second-banana in the world of soft drinks, PepsiCo (NYSE: PEP), continues to look like a solid momentum name with bullish potential. Earlier today, the company affirmed that it is on track to match earlier projections for its full-year earnings figures.

For fiscal 2007, PepsiCo officials expect to bank at least $3.39 per share (implying actual results could be north of this estimate). Excluding items related to restructuring and a third-quarter tax settlement, PepsiCo will earn $3.35 per share, a shade below analysts' expectations of $3.38 per share.

The company also reiterated its fiscal 2007 cash flow estimate of at least $7 billion from operating activities, roughly $2.6 billion in capital spending, and $4.3 billion worth of stock buybacks.

The stock has been in the news of late. Last week, the company announced a restructuring that will separate the firm into three units: food in the U.S.; drinks in the U.S.; and food and drinks internationally. PepsiCo is the parent of the Frito-Lay and Quaker brands.

Its shares are flat in pre-market activity today after gaining nearly 1.1% yesterday.

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

For the fifth straight quarter, PepsiCo Inc. (NYSE: PEP) reported estimate-beating earnings with outstanding second quarter numbers. Analysts had been looking for the company to show earnings of $0.89 per share, but the company surprised to the upside with $0.94 a share thanks to a 13% jump in quarterly profits.

A good part of this past quarter's success can be attributed to a great boost in its international business, which showed an impressive 18% increase in profits. Other factors that helped push earnings higher were a lower tax rate and strong sales by its Frito-Lay snacks.

In addition to putting up a strong second quarter, the company also announced that it now sees higher full year numbers than it had previously expected. It raised its full year forecast from $3.30 per share to $3.35 a share. This wasn't that surprising as I mentioned yesterday in my earnings preview that Bryan Spillane from Banc of America Securities told his clients he was expecting to see the company show improving growth in the second half of the year.

So far in the pre-market, shares of Pepsi have actually traded down slightly, but we will get a better idea of what Wall Street thinks once the stock opens and trades in this mornings real session. The company is going to be hosting its quarterly earnings call at 11 AM EDT and I will be liveblogging the call in its entirety, so be sure to check back for full, up to the minute coverage on today's call.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer

Americans are having a love affair with anything that contains even a hint of fruit. Consumer demand is so high, the U.S. is on a pace to roll out a record number of products that claim to have fruit content, according to Datamonitor. There have been over 240 fruit-related products launched in the past six months alone, compared to 124 in all of 2000.

Marketers have taken the fruit craze so seriously that Kraft Foods Inc. (NYSE: KFT) will launch nine products in 27 fruity varieties this year. Other products include PepsiCo Inc.'s (NYSE: PEP) Frito-Lay brand Flat Earth Baked Fruit Crisps, with half a serving of fruit per ounce. Kraft's Jell-O is launching its first ready-to-eat Jell-O cut with fruit pieces, aptly named Fruit Passions. Baskin-Robins' has come out with a kid-friendly mixed berry blend called Penguin Swirl that turns your tongue black.

The fruit craze comes two years after the government changed the Food Pyramid's recommended level of fruit and vegetable consumption, which created greater demand. Tom Vierhile, director of Datamonitor's Productscan Online, told USA Today that some marketers may also be looking for ways to get their banned products back in schools. "Fruit gives a positive that marketers can talk up."

But schools, as well as the general public, need to be savvy label readers. While some new products might be"fruit-infused," they're not always healthy. Krispy Kreme's (NYSE: KKD) jelly-filled donuts could never be seen as a "healthier alternative" to those delicious creme-filled donuts. What ever happened to a good ol' piece of fruit? Caveat cenator.

Every day millions of parents send their children off to school, often worrying about what their child will encounter during the school day. Typical worries include violence, harassment, drugs, etc. But for one Colorado eighth-grader, the unthinkable happened Wednesday as he found a dead mouse in his school-bought lunch!

The mouse was apparently discovered in a bag of Frito-Lay barbecue potato chips the student had purchased from his school. Frito-Lay, a unit of PepsiCo. (NYSE: PEP), said it is having the suspected bag of chips sent to corporate headquarters for inspection.

The boy is a student at Lewis-Palmer Middle School in Monument, about 40 miles south of Denver. While Frito-Lay officials have still not come straight out and admitted there was indeed a mouse in the boy's lunch, this definitely does not appear to be a prank. Sure, kids like to play jokes, but since the boy was eating with his parents and several other students who back up the story, this seems like the real thing.

Hopefully Frito-Lay will be able to figure out just how this mouse did wind up in the child's lunch and take whatever steps are needed to ensure that this does not repeat itself. After all, parents have enough to worry about when sending their kids off to school -- finding mice in their lunch is a worry everyone can do without.

Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.