) posted adjusted earnings (excluding special items) from
continuing operations of 7 cents per share for fourth-quarter of
2012 compared with 3 cents in the year-ago quarter. The results
missed the Zacks Consensus Estimate of 19 cents. Profit went up
significantly to $13 million from $5 million in the year-ago
On a reported basis, the company recorded a profit from
continuing operation of $17 million or 10 cents per share
compared with a loss of $7 million or 4 cents in the fourth
quarter of 2011.
MeadWestvaco reported adjusted earnings from continuing operation
of $1.25 per share for 2012, down 10.1% from $1.39 a year ago.
Reported earnings decreased to $212 million or $1.20 per share
from $217 million or $1.25 per share in 2011.
Total revenues increased 3.6% to $1.33 billion in the reported
quarter, marginally missing the Zacks Consensus Estimate of $1.34
billion. The year-over-year rise reflects hike in sales volume of
higher value products across the targeted packaging and specialty
chemicals markets together with higher land sales.
The company's revenues for the year increased 2.7% to $5.5
billion from $5.3 billion in 2011.
Cost of sales increased 2% year over year to $1.1 billion in the
fourth quarter. Selling, general and administrative expenses went
up 1.1% to $183 million.
Food & Beverage:
Revenues in the segment dropped 1.3% year over year $744
million. The decline was due to unfavorable foreign currency
translation, which was partly offset by higher pricing and
product mix and contribution from the caps and closures of
Home, Health & Beauty:
Revenues in the segment decreased $1 million to $180 million. The
drop in revenues was due to unfavorable foreign currency
translation effects and contractual resin-based pricing
adjustments, partly offset by higher volumes from personal care
dispensing and medical pumps and benefits from caps and closure
Revenues in the segment declined 1.7% to $118 million. The
decline was due to negative currency exchange impact, partly
offset by increase in sales volume and benefits from higher
pricing and product mix.
Revenues in the segment increased 20.2% to $232 million. The
escalation was fueled by volume gains in targeted pine chemicals
and carbon technology markets.
Community Development and Land Management:
Revenues in the segment surged 60% to $56 million.
Cash and cash equivalents increased to $663 million at the end of
2012, from $656 million at the end of 2011. Long-term debt
amounted to $2.1 billion as of Dec 31, 2012, versus $1.9 million
as of Dec 31, 2011.
Cash flow from continuing operations declined to $330 million in
2012, compared with $479 in the 2011. The decline in cash flow
was due to higher prepaid taxes related to capacity expansion in
Brazil, increased payments for settlement of legacy environmental
matters and higher level of inventory. Capital expenditure from
continuing operations was approximately $656 million in 2012
compared with $655 in 2011.
The company expects to record higher revenues in the first
quarter of 2013 compared to fourth quarter of 2012, driven by its
profitable growth strategies, expansion in Brazil and benefits
from acquired businesses. However, it anticipates that earning
per share will decline year-over-year due to higher startup
expenses for the expansion in Brazil, and lower earnings from
We appreciate MeadWestvaco's strategy of becoming more of a
packaging company moving forward with its investments in adding
capacity and expansion in emerging markets. However, sluggish
global demand, unfavorable foreign currency and start-up expenses
from the expansion activities will put pressure on the company.
MeadWestvaco retains a Zacks Rank #3 (Hold).
Graphic Packaging Holding Company
nternational Paper Co.
UFP Technologies, Inc
) are performing well in the same industry where MeadWestvaco
operates. Graphic Packaging and International Paper are Zacks
Rank #1 (Strong Buy) stocks while UFP Technologies carries a
Zacks Rank #2 (Buy).
GRAPHIC PKG HLD (GPK): Free Stock Analysis
INTL PAPER (IP): Free Stock Analysis Report
MEADWESTVACO CP (MWV): Free Stock Analysis
UFP TECH INC (UFPT): Free Stock Analysis
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