PepsiCo hampered by restructuring charges Persistent struggles in PepsiCo's US beverage business hampered its third-quarter earnings on Wednesday, raising questions about whether chief executive Indra Nooyi's plan to revive the company is on track. Net revenues in PepsiCo's US drinks unit were down 7 per cent, with sales of still and sparkling beverages both declining. Weakness in the domestic drinks business has been a sore spot with investors in recent years and Ms Nooyi launched an aggressive "reset" in February to make its core brands more competitive with rival Coca-Cola. Although analysts continue to question whether PepsiCo is investing enough in its drinks brands, Ms Nooyi said challenges were mainly due to problems with its Gatorade sports drinks and the fact that the company cut back on selling unprofitable juices. "We've always said we want to grow this beverage business profitably and this year was a big reinvestment year," Ms Nooyi said on a conference call with analysts. Going into next year we want to play this game in North American beverages very responsibly and make sure we're generating profit growth. Ms Nooyi also signalled that PepsiCo was on the cusp of a breakthrough in its sweetener technology that could provide a big boost to its cola brands by 2014. "They love bubbles, they love the caffeine, they love the cola taste, but [we'll] address any barrier that might exist in the areas of sugar in the portfolio of artificial sweeteners," Ms Nooyi said. PepsiCo's results come as the soda industry is under growing pressure from US regulators who link their products to obesity. Two California cities are considering soda taxes next month and last week the American Beverage Association filed a lawsuit to prevent a ban on "supersized" soft drinks in New York City. Hugh Johnston, PepsiCo's chief financial officer, said that he did not expect the ban to have an impact on the company's bottom line and said the company was prepared to provide the required bottle sizes if other cities follow suit. Overall, net income at PepsiCo fell 5 per cent to $1.9bn, or $1.21 a share, as revenues also fell 5 per cent to $16.6bn. While the revenues fell short of Wall Street analysts" estimates, the profits exceeded projections and PepsiCo's shares rose slightly in midday trading. Sales volume in PepsiCo's snacks business rose 6 per cent year-on-year, outpacing beverage sales, which rose 3 per cent. PepsiCo attributed the revenue decline to refranchising of its China and Mexico businesses. The company also faced high commodity costs and was hurt by the stronger US dollar.