July 17 (Reuters) - PepsiCo ( PEP ) said on Thursday

that it was expecting a smaller drop in annual core profit,

helped by a rebound in demand for its energy drinks and

healthier soda brands in the United States as well as benefits

from favorable foreign exchange rates.

PepsiCo ( PEP ) shares were up 1.2% in premarket trading after

the company reported a surprise rise in second-quarter revenue.

The stock is down about 11% this year.

The company now expects full-year core earnings per share to

fall 1.5%, compared with a 3% decline expected previously.

"Our core USD EPS outlook has improved versus our previous

expectations as foreign exchange headwinds have moderated, due

to the weakening of the U.S. dollar," CEO Ramon Laguarta said in

a statement, adding that North America business improved in key

categories and channels.

PepsiCo ( PEP ), like rival Coca-Cola, has responded to a shift

towards healthier snacking from consumers by offering options

such as its recently acquired prebiotic soda brand Poppi and new

flavors under popular brands such as Lay's and Doritos.

While higher prices over the past few years have helped

shield the company's margins, PepsiCo ( PEP ) is also trying to offer

more products are lower price points to appeal to cost-conscious

consumers.

The company's second-quarter revenue rose about 1% to

$22.73 billion, compared with analysts' average estimate of a

0.99% decline to $22.28 billion, according to data compiled by

LSEG.

(Reporting by Juveria Tabassum in Bengaluru; Editing by Anil

D'Silva)