MeadWestvaco Q3 Profit Rises, But Misses View; Shares Down

(RTTNews) - Packaging company MeadWestvaco Corp.(MWV), Tuesday reported an increase in profit for the third-quarter, driven largely by growth in revenues. Nonetheless, both earnings and revenues for the quarter came in short of Wall Street expectations. Shares of the company fell nine percent on the New York Stock Exchange following the announcement of results.

Moving ahead, MeadWestvaco expect fourth-quarter earnings to be significantly above the year-ago levels.

Richmond, Virginia-based MeadWestvaco's profit for the third quarter rose to $80 million or $0.44 per share from $51 million or $0.28 per share last year. Last year results included a loss from discontinued operations of $0.10 per share.

Excluding special items, adjusted earnings were $0.49 per share, up from $0.39 per share last year. On average, 12 analysts polled by Thomson Reuters expected earnings of $0.52 per share for the quarter. Analysts' estimates typically exclude one-time items.

The company in a statement attributed the increase in profit to growth in targeted packaging and specialty chemicals markets, increased land sales, as well as overhead cost savings.

"Good progress with our profitable growth strategies across our businesses helped us deliver improved sales and earnings in an environment of still sluggish consumer demand and increased volatility in emerging markets," said Chief Executive John Luke.

MeadWestvaco's sales for the third quarter grew to $1.43 billion from $1.40 billion last year. Analysts expected revenues of $1.46 billion for the period.

Industrial segment sales grew to $132 million from $114 million, while specialty chemical business rose to $260 million from $255 million. Sales in food and beverage segment inched down to $796 million from $806 million, while home, health and beauty segment sales also fell to $185 million from $187 million.

Looking forward to the fourth quarter, MeadWestvaco expect earnings to be significantly above the year-ago levels on a continuing operations basis.

MWV is trading at $35.41, down $3.36 or 8.67%, on the NYSE, on a volume of 2.1 million shares.