(By Balaseshan) MeadWestvaco Corp. (NYSE: MWV), which provides packaging solutions, swung to a quarterly profit on volume gains in targeted consumer and industrial packaging markets, as well as gains in specialty chemicals markets. However, results missed Street's expectations, sending its shares down 5.86% in premarket.
Earnings from continuing operations for the fourth quarter were $17 million or $0.10 per share, compared to a loss of $7 million or $0.04 per share last year. Adjusted earnings per share (EPS) from continuing operations rose to $0.07 from $0.03.
Net sales rose 3.6% to $1.328 billion. Excluding the effect of unfavorable foreign currency exchange, sales grew 6% due to volume gains in targeted consumer and industrial packaging markets, as well as gains in specialty chemicals markets, as well as from higher land sales.
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Analysts, on average, polled by Thomson Reuters had expected a profit of $0.18 per share on revenue of $1.33 billion for the fourth quarter.
Pretax income from its business segments climbed 29%, driven by increased profits in the Food & Beverage and Community Development and Land Management segments, and by strong earnings in the Specialty Chemicals segment.
On January 28, MWV declared a regular quarterly dividend of $0.25 per common share. The dividend will be paid on March 1, to shareholders of record on February 7.
Looking ahead into the first quarter of 2013, MWV expects stronger demand compared to the dramatic decline the company experienced in the fourth quarter of 2012.
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However, the company expects modestly lower earnings from last year principally due to a difficult comparison in the Industrial segment, including higher startup expenses related to the Brazilian expansion, as well as lower earnings from land sales in the Community Development and Land Management segment.
Despite what MWV predicts to be a challenging demand environment, the company projects sales, earnings and cash flow to grow in 2013 due to continued execution of the company's profitable growth strategies, significant contribution from its expanded platform in Brazil, as well as benefits from acquired businesses.
MWV closed Tuesday's regular session at $32.93. The stock has been trading between $26.15 and $33.26 for the past 52 weeks.