RICHMOND, Va. (AP) — MeadWestvaco Corp.’s third-quarter profit fell more than 56 percent from a year ago as the packaging company spun off its consumer and office products business in May.
The Richmond, Va., company on Tuesday reported earnings of $51 million, or 28 cents per share for the three months that ended Sept. 30. That’s down from $117 million, or 67 cents per share, a year ago. Adjusted for restructuring charges and income from discontinued operations, MeadWestvaco earned $67 million, or 39 cents per share, matching analyst expectations.
Revenue fell about 1 percent to $1.4 billion as gains in specialty chemicals couldn’t offset declines in packaging for industrial, home, health and beauty products. It also saw declines in land sales. Analysts expected revenue of $1.41 billion.
MeadWestvaco said it saw solid volume growth, led particularly by gains in corrugated packaging in Brazil, retail food and beverage packaging in North America and health care packaging, as well as increased sales for its specialty chemicals for asphalt, adhesives, inks and oilfield drilling.
The company says it is “continuing to navigate well through the uneven demand environment,” and is prepared to respond to “negative near-term demand impacts” that could arise following the presidential election, “the so-called ‘fiscal-cliff’ event, as well as from global macroeconomic challenges.” The “fiscal cliff” refers to higher tax rates and government spending cuts scheduled to kick in at the beginning of the year, unless Congress works out a compromise before then.
MeadWestvaco said sales and profits from specialty chemicals grew 13 percent and nearly 11 percent respectively during the quarter. Sales in its home health and beauty packaging segment fell nearly 2 percent, but profit for the segment rose 20 percent. Sales in its food and beverage packaging segment were relatively flat but its profit fell 1 percent on higher costs and unfavorable foreign currency exchange.
The company said sales fell 34 percent and profit 42 percent for its community development and land management segment. Its sales of industrial packaging fell 16 percent and its profit fell 72 percent on higher labor costs and expenses related to the startup of a new paperboard machine.
In May, the company completed the spin-off and merger of its business that made Mead, Five Star and At-A-Glance branded office and school supplies with ACCO Brands Corp. ACCO, based in Lincolnshire, Ill., makes Swingline staplers and Day-Timer planners.
MeadWestvaco operates in 30 countries and has customers in more than 100 nations. In the last several years, it has gone from a mill-centric paper supplier to a global partner for brands like Procter & Gamble, Coca-Cola and Wal-Mart.
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Michael Felberbaum can be reached at http://www.twitter.com/MLFelberbaum.
