By Aishwarya Venugopal
(Reuters) - PepsiCo Inc's better-than-expected quarterly results on Tuesday pointed to signs of a gradual recovery in its struggling soda business as the company doubled down on efforts to promote colas, setting shares up for their best day in seven years.
The company's North America beverages sales fell 0.9 percent - its smallest drop in four quarters - as the company went "toe-to-toe" with rival Coca-Cola in marketing and pricing and launched a campaign to revive soda sales.
"Every part of our business in North American Beverages is showing sequential improvement," Nooyi said. "As we go into the third quarter, we feel good about the trend rate."
"(PepsiCo) did seem like that they are starting to see some sort of inflection point in the (beverages) results."
Sales at Frito-Lay North America, its biggest business, grew for the second straight quarter, rising 4.3 percent on the back of higher sales of its newly launched products Doritos Blaze and Ruffles Mozzarella and Marinara.
The company has been ramping up its snacks offering to overcome its sluggish beverage sales by introducing products with new flavors, healthier preparation methods and attractive packaging.
Net income attributable to the company fell about 14 percent to $1.82 billion, in the second quarter ended June 16, mainly due to higher costs for transportation and raw materials.
Pepsi also played down the impact of tariffs imposed by the United States on aluminum imports, saying it so far was "immaterial".
Shares of the company were up 3.7 percent at $111.78 in morning trading.
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