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Oh, no PepsiCo!

This isn’t the way to start off third-quarter earnings season.

Before the New York Stock Exchange opened this morning, October 7, PepsiCo (PEP) reported third quarter earnings of $1.22 a share, exactly matching the Wall Street analyst consensus. Revenue came in at $15.51 billion, slightly above the consensus projection of $15.38 billion.

But the stock was down 3.2% as of 3:00 ET.

Why? Ah, guidance for the fourth quarter.

PepsiCo cut its guidance for the full 2010 year to $4.08 to $4.12 a share. Before today’s report, Wall Street was looking for earnings of $4.17 in the year.

The problems are the same ones that PepsiCo has grappled with all year:  Slow sales of beverages in North America as tastes shift away from cola drinks, and volatile currency exchange rates.

So why the big drop today on what is essentially nothing new? After the September rally investors and traders are looking for reasons to take profits and PepsiCo’s report gave them one.

Before the report PepsiCo shares were trading at a price to earnings ratio of 17 times current earnings. That’s apparently didn’t strike the market as expensive until the company lowered its full year growth rate to 11% to 12% from 11% to 13%.

That’s all it took.

And it’s not a good sign if the market is unwilling to cut a company like PepsiCo any slack at today’s prices. (For more on my take on earnings season and the potential for an earnings-season dip see my post )