It’s still the same old story, a song of… Wait. That’s a different story. This one is about the way that a strong dollar has cut revenue and earnings in the second quarter now being reported for the big international consumer companies such as McDonald’s (MCD), Coca Cola (KO),and now PepsiCo (PEP).

Before the open on July 22, the company reported second quarter earnings of $1.06 a share, 6 cents a share above Wall Street estimates, but flat with the second quarter of 2008. Revenue fell  $400 million short of Wall Street’s $10.99 billion in projected revenue, dropping about 3% from the second quarter of 2008.

Take out the effect of a stronger dollar, which makes overseas revenues denominated in baht, won, euros or whatever worth fewer dollars when they’fre translated for a U.S. company’s financials, and the story is very different. In constant currencies earnings per share climbed 8% and revenue was up 5.5%.Management is doing exactly what investors should want to see during tough times:  maintain marketshare and cut costs.

Globally unit volumes were up 1%–but that hides huge regional variation. The Frito-Lay North American snack foods business showed a 3% increase in volume, while beverage volume fell by 6%. International volumes grew by 3%.

Profit margins actually increased this quarter. Gross margins, for example, climbed 0.3 percentgage points, as cost cutting and p;roductivity iniatives kicked in.

The company reaffirmed its targets for 2009 of mid-to-high-single-digit, constant-currency revenue and earnings  growth. Earnings for the full year, management said, will be in a range of $3.68 to $3.79, basically flat with 2008 earnings of $3.68 a share.

As of July 22, 2009, I’m keepinbg my target price at $62 a share by March 2010.  On July 22 the shares carried a 3.2% dividend yield.