MeadWestvaco Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component MeadWestvaco (NYSE:MWV) will unveil its latest earnings tomorrow, Wednesday, January 30, 2013. MeadWestvaco provides packaging solutions to clients in the healthcare, personal and beauty care, food, beverage, tobacco, media and entertainment, and home and garden industries.

MeadWestvaco Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 19 cents per share, a decline of 26.9% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from 18 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 19 cents during the last month. For the year, analysts are projecting net income of $1.38 per share, a decline of 28.1% from last year.

Past Earnings Performance: The company met estimates last quarter after beating the forecasts in the prior two. In the third quarter, the company reported profit of 39 cents per share versus a mean estimate of net income of 39 cents per share. In the second quarter, the company beat estimates by 7 cents.

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A Look Back: In the third quarter, profit fell 56.4% to $51 million (28 cents a share) from $117 million (67 cents a share) the year earlier, meeting analyst expectations. Revenue fell 14.9% to $1.4 billion from $1.64 billion.

Here’s how MeadWestvaco traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:


Wall St. Revenue Expectations: Analysts predict a decline of 11.3% in revenue from the year-earlier quarter to $1.33 billion.

Stock Price Performance: Between November 26, 2012 and January 24, 2013, the stock price had risen $3.00 (10.2%), from $29.38 to $32.38. The stock price saw one of its best stretches over the last year between June 1, 2012 and June 8, 2012, when shares rose for six straight days, increasing 6.3% (+$1.65) over that span. It saw one of its worst periods between April 30, 2012 and May 9, 2012 when shares fell for eight straight days, dropping 13.2% (-$4.21) over that span.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 8.6% in the second quarter and dropped again in the third quarter.

Analyst Ratings: With eight analysts rating the stock a buy, none rating it a sell and two rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 2.05 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands. The company improved this liquidity measure from 1.81 in the second quarter to the last quarter driven in part by an increase in current assets. Current assets increased 13.5% to $2.22 billion while liabilities rose by 0.5% to $1.08 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)