PBG Pepsi Bottling Grp.

PepsiCo Inc.'s (PEP) fourth-quarter earnings nearly doubled amid prior-year commodity hedging charges, and the soda maker said it will reap larger cost savings from buying its bottlers than previously expected.

The company's deals to buy bottlers PepsiAmericas Inc. (PAS) and Pepsi Bottling Group Inc. (PBG) are expected to close at the end of February and are being closely watched because they will push broad changes in how the company sells its beverages in the U.S. PepsiCo said Thursday that it expects pretax synergies, or cost savings from the deals, to hit $400 million by 2012, higher than its previous estimate of $300 million.

The soft drink and snacks company also announced plans Thursday to resume share buybacks and said its North America beverages business, which has been a weak spot for many quarters, was starting to show some improvement amid market share gains for brands like SoBe Lifewater and Gatorade. Sports drink Gatorade, a key brand for the company, suffered as consumers pulled back in the recession.

The PepsiCo Americas Beverages unit, which covers North America and Latin America, saw operating profit excluding restructuring charges grow 10% in the fourth quarter but its volume continued to decline, falling 5%.

"Hopefully the bottler acquisitions will help North American beverage performance going forward. The key now is to get these deals closed," said Edward Jones analyst Jack Russo.

The deals will allow the company to be more flexible in how it distributes brands like Gatorade and products like bottled water, Chief Financial Officer Richard Goodman told reporters.

The company's snacks business held up well during the downturn, and revenue at the Frito Lay North America division grew 3% in the fourth quarter. Revenue at the company's PepsiCo International, also another key area of growth for the company, rose 8%. PepsiCo said it will boost its investment in building its infrastructure in key emerging markets even further, signaling that these faster growing markets will be a major area for investment.

"We will grow in the U.S., but we will grow much faster internationally," said Goodman.

On a conference call, Chief Executive Indra Nooyi said the company is ramping up its investment in China, where the company has received government permission to build new plants. The food and beverage maker plans to invest about 8 cents a share in emerging markets, developing healthier new products and in other parts of its business.

PepsiCo has also been boosting its emphasis on research and development, hunting in particular for new products that can be marketed to health-conscious consumers. "We believe there [are] some breakthroughs possible in North American beverages," said Nooyi. "If those breakthroughs do come to fruition we will invest behind it....But North American beverages investment is only going to happen if there's a breakthrough." She didn't say what kind of new products or breakthroughs the company expects. The stock was recently up 0.9% to $60.95.

The company expects share repurchases, together with a voluntary $600 million funding of its pension plans, will amount to about $5 billion in 2010.

PepsiCo affirmed its 2010 earnings growth forecast. Assuming the bottler deal closes, the company expects 2010 per share earnings excluding special items to grow by 11% to 13% on a constant currency basis from fiscal 2009 earnings of $3.71. The company expects growth in the first half of the year to be slower than the second half. Profits at its Frito Lay business are expected to benefit from lower commodity prices.

Pepsi, which tempered its expectations in December, reported a profit of $1.43 billion, or 90 cents a share, up from $719 million, or 46 cents a share, a year earlier. The prior year included 42 cents in charges. Revenue increased 4.5% to $13.3 billion.

Analysts polled by Thomson Reuters most recently forecast earnings of 90 cents on revenue of $13.26 billion. Goodman said Pepsi's stronger-than-expected cash flow will allow the company to resume its share buyback program after it completes its acquisitions of Pepsi Bottling Group and Pepsi Americas.

-By Anjali Cordeiro, Dow Jones Newswires; 212-416-2200; anjali.cordeiro@dowjones.com

(Tess Stynes contributed to this article)

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