MeadWestvaco Earnings Cheat Sheet: Profits Beat Street As Sales Dip

S&P 500 (NYSE:SPY) component MeadWestvaco Corporation (NYSE:MWV) reported net income above Wall Street’s expectations for the first 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 First Quarter

Results: Net income from continuing operations for MeadWestvaco Corporation rose to $71 million (41 cents/share) vs. $29 million (17 cents/share) in the same quarter a year earlier.

Revenue: Fell 2.6% to $1.36 billion YoY.

Actual vs. Wall St. Expectations: MWV beat the mean analyst estimate of 23 cents/share. Estimates ranged from 14 cents per share to 30 cents per share.

Quoting Management: “We continue to demonstrate the benefits of our transformed business through revenue and earnings growth across the company,” said John A. Luke, Jr., chairman and chief executive officer of MWV. “We generated record first quarter results by building our business in targeted markets, expanding market share for our most valuable products, and aggressively driving value-based pricing in the face of inflationary pressures. The step-change in our performance stems from the work we have done over the past several years to reshape our market participation and our cost structure, and it has MWV off to a very good start in what we expect will be another year of progress for our company.”

Key Stats: Last quarter marked the fifth consecutive quarter of gross margins expanding as the company’s gross margin expanded 5.8 percentage points to 23.2% from the year earlier quarter. Over that span, margins have grown on average 5.6 percentage points per quarter on a year-over-year basis.

Over the last five quarters, revenue has fallen an average of 2.8% year over year. The biggest drop came in the fourth quarter of the last fiscal year, when revenue fell 18.9% from the year earlier quarter.

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), and Celulose Irani SA (RANI3).

Today’s Performance: Shares of MWV are trading at $33.10 as of April 27, 2011 at 10:43 AM ET, up from the previous close.


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