Pepsi Bottling (NYSE:PBG) showed signs of life on Tuesday, giving investors some reason for optimism regarding Pepsi (NYSE:PEP) and its affiliates. Investors are likely excited over the prospect that Pepsi's outpacing archrival Coca-Cola (NYSE:KO) and Coca-Cola Enterprises (NASDAQ:CCE), which have been surrounded by flat news lately.

For the third quarter, Pepsi Bottling profits rose 4.4% to $191 million, or $0.73 per diluted share, which includes a $0.02 one-time gain from tax benefits. Revenues climbed to $2.93 billion. The company reported volume growth in all key markets, an important metric to watch with Pepsi Bottling and related entity Pepsi.

Pepsi Bottling, which also had an upbeat second quarter, adjusted the lower range of its fourth-quarter earnings guidance slightly higher today, now calling for 10% to 12% growth with earnings of $1.71 to $1.74 per share. It also said that worldwide case volume growth should be in the 2% to 3% range, with domestic volume up about 2%. Though it's a modest increase, it's better than recent news about Coke, where case volumes will remain flat for the year.

This time last year, Pepsi Bottling suffered a lackluster quarter due to problems in Mexico. This time around, Mexican volumes increased 3%, so, while they're still problematic, Chairman and CEO John Cahill said he believes Mexico operations are on track for "sustained improvement."

Popular products include Tropicana, and the Mountain Dew brand of drinks did well, boosted by a Halloween novelty offering, Mountain Dew Pitch Black. Pepsi's been working hard to have a pipeline of novelty products, considering the strength of the Pepsi Vanilla launch some time ago.

Among red flags pointed out in the conference call were concerns that retailers have not passed on some of Pepsi Bottling's price increases to consumers yet, due to the "traffic building capability" of the category. Considering that part of Coke's recent woes have had to do with pricing missteps, investors may want to keep a careful eye on how the price of Pepsi strikes consumers.

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Alyce Lomax does not own shares of any of the companies mentioned.