The world's two biggest beverage companies reported third-quarter earnings this week with mixed results. PepsiCo (NYSE:PEP) posted earnings of $1.23  per share on a GAAP basis, compared to EPS of $1.21 in the year-ago period . Pepsi's net revenue rose 1.5% to $16.9 billion in the quarter . Coca-Cola (NYSE:KO), meanwhile, earned a profit of $0.53  per share, which was inline with analyst estimates. Yet, Coke's net revenue dipped 3% in its third-quarter to $12.03 billion because of restructuring costs in Brazil and the Philippines .

The bigger picture
While quarterly results are important, they don't always tell the whole story. Let's take a closer look at what's bubbling below the surface for Pepsi and Coke as the end of the year draws near.

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Source: Coca-Cola 2012 Annual Report

Coke is one of the most well known brands in the world. The company continues to use this to its advantage as it invests in international growth projects. In fact, the world's largest drink maker is pouring billions into expansion efforts in China, India, and Brazil. True, Coca-Cola products are already distributed in more than 200 countries worldwide . However, per capita consumption of its products remains low in emerging markets  -- creating an opportunity for growth in those regions.

In India, for example, 2012 per capita consumption was only 14 servings . To put that in perspective, 401 servings of Coke products were consumed per person in the U.S. last year . As the middle class in China and India grows, so too should Coke's influence in those markets.

Nevertheless, weakening  demand for soft drinks in North America is particularly concerning for Coke. Soda accounts for nearly 70% of Coke's global sales , whereas Pepsi relies on its Americas Beverages division for just 33% of its total net revenue . Perhaps this helps explain why shares of Coke are up just 8 % year-to-date, compared to a 23% gain for Pepsi .

Expansion into emerging markets is where Coke and Pepsi's growth strategies intersect. Similar to Coke, Pepsi sells its beverages and snacks in nearly 200 countries around the world. It's also heavily investing in foreign markets. By the end of 2013, Pepsi will have invested more than $2.5 billion in China .

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Source: PepsiCo

The sweet taste of Pepsi's rebound
While growth in emerging markets is exciting, the real growth driver for Pepsi today is its global snacks business. In 2012, Pepsi had 22 brands that each generated $1 billion or more in sales . Its Frito-Lay business has been particularly important in sustaining Pepsi's lead as the world's largest snack-food company by market share . However, its strength in snacks has also been one of the company's biggest headaches lately.

Activist investor Nelson Peltz is pushing for a breakup of Pepsi's beverages and snacks units. On top of this, Peltz  is calling for a merger between Pepsi and Mondelez International (NASDAQ:MDLZ). Making a bid for Mondelez would certainly play to Pepsi's strength in the snacks arena. Rumors of a potential deal surfaced earlier this year, following Kraft Foods' (NASDAQ:KRFT) 2012 spin-off of its North American grocery business, which it then renamed Mondelez International .

A combined Pepsi-Mondelez would bring additional billion-dollar brands to Pepsi's portfolio including Oreo and Cadbury chocolate. Furthermore, Peltz's  investment firm suggest a Pepsi-Mondelez deal could create as much as $6 billion in cost and revenue synergies for the company, according to a Trian white paper. Shares of Mondelez are up more than 28% on the year . Nevertheless, Pepsi's CEO Indra Nooyi remains opposed to a potential Pepsi-Mondelez merger .

Have your snacks and drink Coke too
From a big picture perspective, both PepsiCo's and Coca-Cola's shares offer promising growth trajectories with increasing dividends. If these company's have taught us anything it is that.



Fool contributor Tamara Rutter owns shares of PepsiCo. The Motley Fool recommends Coca-Cola and PepsiCo. The Motley Fool owns shares of PepsiCo. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.