Given persistent challenges in Pepsi's (NASDAQ:PEP) two biggest segments, soda and packaged snacks, investors have modest expectations heading into the fourth-quarter earnings report this week. The food and beverage giant is likely to wrap up another disappointing fiscal year marked by slowing sales gains and roughly flat core earnings.

But shareholders might be in for a few surprises when earnings are released on Friday, Feb. 15. This report will be Pepsi's first under new CEO Ramon Laguarta, who might announce strategic changes around the company's sales growth and capital return plans. The announcement will also include key updates on the integration of its recently completed SodaStream acquisition.

Hitting the target

The core growth picture hasn't been impressive lately. Through the first nine months of 2018, Pepsi's sales volumes inched higher by just 2%, to mark a slowdown from the prior-year period. Organic sales have been flat in the key U.S. beverage portfolio as increases in sports-drink and water sales struggled to offset continued declines in soda.

A glass of soda.

Image source: Getty Images.

Rival Coca-Cola (NYSE:KO) has fared better lately, with organic growth reaching 6% last quarter on the strength of the global hit Coca-Cola Zero Sugar franchise. Coke will post its earnings results just before Pepsi does this week, so by Friday investors should have a good reading on whether that performance gap persisted into the early weeks of 2019.

In any case, Pepsi's snacking division is likely to continue its stronger showing. The Frito-Lay segment has been a standout performer lately with the Doritos chip franchise helping lead organic sales higher by 3% through most of 2019. Assuming the positive momentum held up over the holiday season, look for Pepsi executives to highlight these snacking wins on Friday.

Price check

Pepsi is enduring rising costs on commodities across its portfolio. That headwind has been compounded by the weak industry growth picture, which has meant the company had to spend aggressively on advertising and marketing to protect sales volumes. Altogether, these issues drove a 5-percentage-point drag on operating profit through the first three quarters of the year. That's a trend that investors are eager to see quickly reversed.

Cost cuts have helped protect earnings so far, but Pepsi will need to find a way to pass along most of its rising expenses to consumers in the form of higher pricing. Any hints it makes toward that goal this week, including with average price boosts, would be reason for investor optimism so long as Pepsi doesn't have to give up ground on its market-share position.

Significant changes ahead?

The bigger questions on investors' minds revolve around Pepsi's overarching growth ambitions. Is the Laguarta era going to be defined by a continued focus on modest gains among the 22 billion-dollar franchises it already owns, or will the company shift toward more aggressive portfolio moves like the recent $3 billion SodaStream acquisition.

Changes here would have an outsized impact on Pepsi's cash return program that today delivers much of the company's annual $6 billion of free cash flow to shareholders as dividends and stock buybacks. A changing of leadership is a natural time to review whether some of that cash can be better spent on initiatives aimed at securing faster sales growth starting in 2019.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.