MeadWestvaco Corporation (MWV) reported solid profit improvement across all of its businesses for the third quarter of 2009. Pre-tax earnings from the company’s business segments increased 43% to $204 million from $143 million in the third quarter of 2008.
Third quarter 2009 net income from continuing operations was $128 million, or 74 cents per share, compared to $46 million, or 26 cents per share, in the third quarter of 2008. The results for the third quarter of 2009 include after-tax items totaling $42 million, or 24 cents per share. After adjusting for special items, earnings from continuing operations amounted to 50 cents per share, higher than the Zacks Consensus Estimate.
In the Packaging Resources business, profit from continuing operations increased 16% to $74 million in the third quarter of 2009 compared to $64 million in the third quarter of 2008. Sales were $627 million in the third quarter of 2009 compared to $730 million in the third quarter of 2008. This segment improved product pricing and mix, generated strong operational productivity, and benefited from lower input costs compared to last year.
In the Consumer Solutions business, profit more than doubled to $35 million in the third quarter of 2009 compared to $14 million in the third quarter of 2008. Sales were $585 million in the third quarter of 2009 compared to $653 million in the third quarter of 2008. This segment continued to perform well in key global packaging markets, including beverage, healthcare, and home and garden.
In the Consumer & Office Products business, profit increased 34% to $51 million in the third quarter of 2009 compared to $38 million in the third quarter of 2008. Sales in the third quarter of 2009 were $303 million compared to $312 million in the third quarter of 2008. The segment had a solid back-to-school season in North America, with strong positioning and sell-through of proprietary, branded products at leading retailers.
In the Specialty Chemicals business, profit increased 50% to $24 million in the third quarter of 2009 compared to $16 million in the third quarter of 2008.
During the third quarter of 2009, the company completed a tender offer to repurchase $314 million of its 6.85% notes due in 2012. The repurchase was funded by net proceeds pursuant to the issuance of $250 million of 7.375% notes due in 2019, as well as from cash-on-hand. Upon settlement of the tender offer, the company reduced its overall long-term debt by $64 million, and reduced its outstanding 2012 notes from $633 million to $319 million.
Cash flow provided by continuing operations exceeded $540 million in the first three quarters of 2009 compared to $182 million in the first three quarters of 2008.
Capital spending from continuing operations was $140 million in the first three quarters of 2009 compared to $207 million in the first three quarters of 2008.
MeadWestvaco Corporation provides packaging solutions to many of the world’s renowned brands in the healthcare, beauty and personal care, food, beverage, media and entertainment, home and garden, tobacco, and commercial print industries. With 20,000 employees worldwide, MWV operates in 30 countries and serves customers in more than 100 nations. Major competitors include International Paper Company (IP) and Weyerhaeuser Company (WY).
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