Westvaco Reports Lower 1Q Earnings, Sluggish Economy Slows Paper Demand
Press release from the issuing company
NEW YORK, NY, February 27, 2001 -- Westvaco Corporation (NYSE: W) today reported fiscal first quarter earnings of 33 cents per share for the period ended January 31, compared to 50 cents per share earned in the first quarter of fiscal 2000. Revenues for the first quarter total $926.1 million compared to $799.6 million during the same period a year ago.
The decline in earnings primarily reflected slower economic growth and related lower demand for coated papers and bleached paperboard. In U.S. coated paper markets, demand for magazine, advertising, catalog and label papers weakened and the strong U.S. dollar resulted in greater competition from imports. While demand was strong in the first quarter for bleached paperboard used in media packaging applications, other markets declined, most notably food packaging and food service items. Higher energy costs also contributed to the decline in earnings.
Demand for consumer packaging for CD, DVD, cosmetic and personal care products remained strong. In addition, Westvaco's packaging business in Brazil and its specialty chemical business both reported improved performance. The company's first quarter results include a gain of 3 cents per share from the sale of a real estate lease in New York City.
"While we are disappointed by our results in paper and some packaging markets, the current economic slowdown highlights the importance of continuing to emphasize cost control, product innovation and new technologies while intensifying our focus on strong and growing global markets," said John A. Luke, Jr., Chairman and CEO. "We are only beginning to tap the full potential of acquisitions and other strategic initiatives we launched last year."
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