Ceepackaging

Corporate

MeadWestvaco reports on Q3 earnings

Profit from MeadWestvaco’s primary business segments increased 3 percent to $190 million in the third quarter of 2007.  In the nine-month period ended September 30, 2007, profit from MeadWestvaco’s primary business segments increased 12 percent to $416 million from $372 million in the same period of 2006.  In the third quarter and nine-month period of 2007, higher selling prices and improved mix and productivity more than offset higher input costs for energy, raw materials and freight.

“MeadWestvaco’s execution of our packaging strategy continues to deliver consistent earnings improvement in most of our targeted markets,” said John A. Luke, Jr., chairman and chief executive officer.  “During the third quarter, we generated improved profitability for shareholders despite significantly higher costs for critical raw materials.  I am confident that our solid operating performance and focus on execution will result in year-over-year fourth quarter improvement and better overall performance in 2007.”

Mr. Luke added, “MeadWestvaco’s strategy for profitable growth includes a relentless focus on our packaging platform, expansion into emerging markets and building a valuable land management business.  We recently closed the acquisitions of Keltec Dispensing Systems and Hayes Products to augment our pump and sprayer line of business, celebrated the opening of our expanded packaging facility in Wuxi, People’s Republic of China, and completed the sales of non-strategic forestlands for $493 million.  These milestones are an indication that we continue to advance the strategic imperatives we laid out at the beginning of the year to build value for our shareholders.”

Quarterly Comparison

In the third quarter of 2006, net income was $56 million, or $0.31 per share.  Included in the results were after-tax restructuring charges of $12 million, or $0.07 per share, related to asset write-downs and employee separation costs.  In addition, the company incurred after-tax one-time costs of $6 million, or $0.03 per share, related to the company’s cost initiative.

Packaging Resources

In the Packaging Resources segment, profit in the third quarter of 2007 increased 8 percent to $97 million compared to $90 million in 2006.  Sales in the third quarter of 2007 grew 4 percent to $779 million compared to $752 million in 2006.  Segment profit growth and margin improvement was driven by improved price, mix and productivity.  Higher input costs for wood, other raw materials and freight negatively impacted profitability.  Overall paperboard packaging pricing improved 4 percent, reflecting the company’s ongoing pricing actions across its lines of business to offset inflationary costs of raw materials.