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MeadWestvaco warns of lower 3Q earnings

Wednesday, October 15, 2008

Press release from the issuing company

RICHMOND, Va. (October 14, 2008) Packaging company MeadWestvaco Corp. forecast lower third-quarter profit Tuesday, citing higher costs, lower sales volumes and weaker demand in some markets.

MeadWestvaco, which also makes school supplies, said earnings for the three months ended Sept. 30 will be "modestly above previous quarter levels, but below third quarter 2007 levels." The company did not provide further details.

Analysts surveyed by Thomson/Reuters expect earnings of 43 cents per share on revenue of $1.77 billion.

Last year, MeadWestvaco's earnings more than doubled in the third quarter, as higher selling prices and improved product mix and productivity more than offset higher costs for energy, raw materials and freight.

The company reported profit of $121 million, or 66 cents per share, up from $56 million, or 31 cents per share, a year earlier. Excluding restructuring charges, cost-cutting initiatives, and a gain on the sale of West Virginia forestlands, the company earned 46 cents per share. Sales in the third quarter of 2007 grew 3 percent to $1.80 billion from $1.75 billion.

On Tuesday, MeadWestvaco said its cash and cash equivalents at the end of the third quarter were about $550 million. It said the company has no short-term debt or significant maturities due until 2012.

The company said its cash position benefited from the sale of its Kraft division and operating activities in the third quarter.

"Like many others companies, (MeadWestvaco) must now address a particularly challenging and uncertain environment," John A. Luke, Jr., the company's chairman and chief executive, said in a statement.




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