MeadWestvaco Corporation (MWV) reported earnings per share from continuing operations of 11 cents, exceeding the Zacks Consensus Estimate of break-even for the first quarter of 2010.
This reflects overall higher volumes in targeted markets across its global packaging, consumer and office products and specialty chemicals businesses, as well as from an efficient cost structure. Revenues in the first quarter of 2010 increased 3.5% to $1.40 billion from $1.35 billion in the 1Q09.
Segment Details
In the Packaging Resources segment, profit improved to $30 million in 1Q10 compared to $19 million in the 1Q09. Benefits from increased volume and improved product mix and productivity were partially offset by increased production costs of approximately $25 million related to adverse weather.
In the Consumer Solutions segment, profit increased 62% to $21 million in the first quarter of 2010 compared to $13 million in the first quarter of 2009. Increased profit was primarily driven by the segment’s efficient business model, including better manufacturing productivity and lower overhead costs, as well as favorable foreign currency exchange rates.
In Consumer & Office Products, profit increased to $6 million in the first quarter of 2010 compared to a loss of $5 million in 1QFY09, reflecting benefits from productivity actions and higher overall volumes.
In Specialty Chemicals, profit increased to $25 million in 1QFY10 compared to $1 million in the first quarter of 2009. Profit growth in 2010 was driven by higher capacity utilization rates from rebounding volumes across pine chemical products and activated carbon technologies.
In the Community Development and Land Management segment, profit was $23 million in the first quarter of 2010 compared to $56 million in the first quarter of 2009.
Cash Flow and Balance Sheet
Cash flow from operations was $8 million in the first quarter of 2010, down from cash flow provided by operations of $91 million in 1QFY09, driven primarily by higher incentive compensation payments. Capital expenditure was $38 million in the first quarter of 2010 compared to $45 million in the first quarter of 2009. Cash and equivalents were $731 million with long-term debt at $2.1 billion and shareowners’ equity at $3.3 billion.
MeadWestvaco Corporation provides packaging solutions to the healthcare, personal care and beauty, food, beverage, media and entertainment, home and garden, tobacco and commercial print industries worldwide.
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