Pepsi Co. (PEP) will report its third-quarter earnings Tuesday before the market opens.

Wall Street analysts are anticipating an EPS of $1.27 and Revenue of $16.19 Billion. The Estimize consensus is more optimistic, expecting an EPS of $1.30 and Revenue of $16.28 Billion.

Can the North American business Provide Growth?

Pepsi Co's North American Business consists of Frito-Lay North America, Quaker Foods North America, and North America Beverages (Latin America is now grouped in its own category.)

Last quarter, Frito-Lay N.A. attributed for roughly 22% of the company's net revenue. The consistency of this business segment has helped counteract currency headwinds on international sales, highlighting a competitive advantage Pepsi has with is competitors, more specifically Coca-Cola. Coca-Cola (KO) and other rivals do not have the multifaceted model of the snack business that Pepsi employs.

Pepsi competes with companies like Mondelez International in the international snack space, however, there is speculation that a merger with Pepsi might be able to benefit Mondelez.

In terms of revenue, the North American Beverage division is Pepsi's bread and butter operation. Last quarter, this division accounted for 32.1% of the company's net revenue. Pepsi owns the likes of Gatorade and Lipton tea, which is helping offset declining soda sales as the trend towards healthier beverages is sweeping the nation.

In order to see substantial growth, Pepsi must be creative with their snack lines. As Americans are looking for healthier options, Pepsi must attempt to cater some of their business towards this trend. However, changing brand perception may be difficult, as Frito-Lay is known for producing and distributing “junk food.” In anycase, the company does have the means to acquire or even create new brands. It remains to be seen how Pepsi tackles this issue.

PEP data by YCharts

Competition with Coca-Cola?