As it is reported, it is clear he is saying Christians ought not to be manufacturing weapons because it leads to distrust. The statement (as reported) is unambiguous- he's making a clear denunciation of calling yourself a Christian but making weapons.
And yes, (as it was reported) he was calling people who invest in weapons manufacturers and call themselves Christians hypocrites. You don't think a hypocrite is a bad Christian?
You are assuming facts not in evidence. Saying "doing X can lead to people having distrust of you" is not the same as "Doing X is bad" or even "People distrusting you is a bad thing." Saying "If your statements and action are at odds you are a hypocrite" and then giving an example of that sort of scenario is not the same as saying anyone who does the actions given in the scenario is a hypocrite.
You're making assumptions about context that are unjustified. I don't know if the pope was or was not making condemnations of people who are involved in the arms trade, or what specifications he may have been putting on that. For example, saying "I think drug dealers are bad" is not the same as "I think pharmacists are bad" even though in both cases the person in question is selling people drugs.
When you read a media report about this pope's words, your first reaction should be "In what way is the media twisting and distorting his actual words to bolster their agenda by attempting to show that he supports it?"
