Packaging company MeadWestvaco Corp. said Wednesday its third-quarter net income from continuing operations rose 7 percent on higher sales in packaging resources and specialty chemicals, but warned of a "modestly lower" fourth-quarter performance.
The Richmond company said it earned $117 million, or 67 cents per share, for the period ended Sept. 30, up from $109 million, or 63 cents per share, a year ago. The year-ago period includes losses from its media and entertainment packaging business that it sold in
September 2010, and the sale of its envelope products business that closed in February 2011.
Earnings adjusted for restructuring costs were 70 cents per share. On that basis, analysts polled by FactSet expected earnings of 64 cents per share.
MeadWestvaco said sales grew 9 percent to $1.64 billion in the quarter, driven by a strong performance in emerging markets and higher prices and productivity gains across most of its product lines. The company said it was helped by gains in packaging markets
for food, tobacco and beverages, as well as specialty chemicals for asphalt, adhesives, inks and oilfield drilling. Analysts expected $1.59 billion.
The company said profit for its specialty chemicals segment grew 27 percent and profit from its packaging resources segment increased 12 percent. It saw profits for its consumer solutions
segment, which include some paperboard and plastic packaging for beverage, tobacco, personal care, home and garden and health care markets, fall 29 percent due to higher supply costs.
"We continue to make progress with commercial strategies designed to capture growth in targeted areas and expand our market share -- even in those markets where demand is being impacted by global economic conditions," CEO John A. Luke, Jr. said in a news release.
But MeadWestvaco cautioned that its earnings in the fourth quarter will be "modestly lower" compared with a year ago due to a planned outage at its Covington paperboard mill and weaker consumer demand.
The company, which operates in 30 countries and has customers in more than 100 nations, has gone through a deliberate transformation over the last several years from a mill-centric paper supplier to global partner for brands like Procter & Gamble, Coca-Cola and
Walmart. MeadWestvaco has said the changes have helped build a company that is more global, innovative and focused.
