MeadWestvaco Earnings Cheat Sheet: Five Quarters in a Row of Expanding Margins, Net Income Climbs

S&P 500 (NYSE:SPY) component MeadWestvaco Corporation (NYSE:MWV) reported its results for the second quarter. MeadWestvaco Corporation provides packaging solutions to clients in the healthcare, personal and beauty care, food, beverage, tobacco, media and entertainment, and home and garden industries.

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MeadWestvaco Earnings Cheat Sheet for the Second Quarter

Results: Net income for MeadWestvaco Corporation rose to $89 million (51 cents per share) vs. $50 million (29 cents per share) in the same quarter a year earlier. This marks a rise of 78% from the year earlier quarter.

Revenue: Rose 8.9% to $1.56 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: MWV reported adjusted net income of 54 cents per share. By that measure, the company fell in line with the mean estimate of 54 cents per share. It beat the average revenue estimate of $1.52 billion.

Quoting Management: “MWV delivered another very strong performance during the second quarter,” said John A. Luke, Jr., chairman and chief executive officer.”We are consistently generating higher sales and profits by executing specific, market-based strategies in our businesses – including a transformed product and geographic mix that has strengthened our earnings power. Even as some of the challenges we expected began to emerge in the second quarter, including uneven economic recovery in developed markets and input cost inflation, we continue to prove that the step change in our performance is sustainable.”

Key Stats:

Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 4.4 percentage points to 24.1% from the year earlier quarter. Over that span, margins have grown on average 4.5 percentage points per quarter on a year-over-year basis.

A year-over-year revenue increase last quarter snaps a streak of three consecutive quarters of revenue declines. Revenue fell 2.6% in the first quarter, 18.9% in the fourth quarter of the last fiscal year and 4.1% in the third quarter of the last fiscal year.

The company fell in line with estimates last quarter after topping expectations in the previous two quarters. In the first quarter, it topped the mark by 20 cents, and in the fourth quarter of the last fiscal year, it was ahead by one cent.

Competitors to Watch: Smurfit-Stone Container Corp. (NYSE:SSCC), Rock-Tenn Company (NYSE:RKT), Packaging Corp. of America (NYSE:PKG), MOD-PAC CORP. (NASDAQ:MPAC), Graphic Packaging Holding Co. (NYSE:GPK), International Paper Co. (NYSE:IP), KapStone Paper and Packaging Corp. (NYSE:KS), Clearwater Paper Corp (NYSE:CLW), Temple-Inland, Inc. (NYSE:TIN).

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(Source: Xignite Financials)

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