MeadWestvaco Corp. (MWV) reported fourth-quarter 2009 results before the opening bell today. The company swung to a GAAP net profit from continuing operations of $51 million from a GAAP net loss of $16 million in the year-ago period.
Excluding special items, earnings per share came in at 22 cents, which missed the Zacks Consensus Estimate of 24 cents derived from 12 covering analysts.
Sales increased marginally by 2.5% to $1.64 billion, compared to $1.60 billion in the year-ago period. The growth was mainly attributable to favorable foreign currency translations, which more than offset sluggish volumes caused by macroeconomic headwinds.
In terms of segments, MeadWestvaco’s flagship Packaging Resources business recorded an 11% decline in profit from continuing operations to $40 million from $45 million in the prior-year quarter. Sales grew marginally to $637 million from $632 million in the year-ago period. The segment’s performance was primarily affected by reduced production in-line with weak demand, partially offset by price increases and lower input costs.
Sales from MeadWestvaco’s Consumer Solutions business declined to $576 million in the reported quarter, compared to $596 million in the prior year period. However, profit exactly doubled to $22 million, from $11 million in the year-ago quarter, as the division witnessed improved profitability from healthcare, personal care, beverage and tobacco packaging markets. Moreover, management initiatives to reduce overhead costs, boost production efficiency and exit unprofitable product lines also helped results.
MeadWestvaco’s Consumer & Office Products business posted a 65% growth in profit to $56 million in the fourth quarter from $34 million in the year-ago quarter. Sales were $306 million, compared to $273 million in the year-ago quarter. The segment primarily benefitted from the recent acquisition of Grafons, a Brazilian notebook and stationery manufacturer, and favorable currency translations.
MeadWestvaco’s Community Development and Land Management business reported a 25% increase in profit to $20 million, compared to $16 million in the year-ago quarter. Sales increased to $43 million from $39 million in the prior year quarter.
MeadWestvaco’s Specialty Chemicals business posted a 78% growth in profit to $16 million in the fourth quarter of 2009 from $9 million in the year-ago quarter.
Cash flow provided by continuing operations exceeded $870 million during full-year 2009, compared to $376 million during 2008.
Capital spending from continuing operations was $224 million in 2009, compared to $288 million in 2008.
MeadWestvaco Corp. 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 Co. (IP) and Weyerhaeuser Co. (WY).
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