Benzinga  Jul 9  Comment 
In a report published Thursday, Citi analyst Anthony Pettinari initiated coverage of WestRock Co (NYSE: WRK) with a Buy rating and price target of $73. The company is the analyst's top pick in the Paper & Packaging space. WestRock was created...
newratings.com  Jun 25  Comment 
WASHINGTON (dpa-AFX) - Rock-Tenn Co. (RKT) and MeadWestvaco Corp. (MWV) announced that shareholders of RockTenn and stockholders of MWV overwhelmingly approved the proposed combination of the two packaging companies into WestRock Company at their...
Benzinga  Jun 24  Comment 
Rock-Tenn Company (RockTenn) (NYSE: RKT) today announced the preliminary results of the elections made by its shareholders as to the form of merger consideration they wish to receive in connection with the combination of RockTenn and MeadWestvaco...
Market Intelligence Center  Jun 8  Comment 
MeadWestvaco Corp (MWV) presents a trading opportunity that offers a 2.37% return in just 102 days. A covered call on MeadWestvaco at the $47.50 level expiring on Sep. '15 offers an assigned return rate of 2.37% or 8.48% annualized. This trade...
newratings.com  Jun 5  Comment 
WASHINGTON (dpa-AFX) - Rock-Tenn Company (RKT) announced the preliminary results of the elections made by its shareholders as to the form of merger consideration they wish to receive in connection with the combination of RockTenn and MeadWestvaco...
Market Intelligence Center  May 21  Comment 
For a hedged play on MeadWestvaco Corp (MWV) MarketIntelligenceCenter.com’s patented trade-picking algorithms recommend the Sep. '15 $50.00 covered call for a net debit in the $48.35 area. That is also the break-even stock price for the covered...
Market Intelligence Center  May 6  Comment 
MeadWestvaco Corp (MWV) traded between $47.45 and $49.45 before closing at $47.99 Tuesday and presents some attractive trading opportunities today. MarketIntelligenceCenter.com’s patented algorithms selected a Sep. '15 $47.50 covered call for a...
Market Intelligence Center  May 5  Comment 
For a hedged play on MeadWestvaco Corp (MWV) MarketIntelligenceCenter.com’s patented trade-picking algorithms recommend the Sep. '15 $47.50 covered call for a net debit in the $45.71 area. That is also the break-even stock price for the covered...
newratings.com  Apr 29  Comment 
WASHINGTON (dpa-AFX) - MeadWestvaco Corp.'s (MWV) first-quarter net income attributable to the company increased to $33 million from the prior year's $31 million, with earnings per share improving to $0.19 from $0.18 last year. Income...


MeadWestvaco (NYSE: MWV), which started calling itself MWV in March 2008[1], makes customized and printed packaging and office paper.[2] Its customers include companies in the food and beverage, media and entertainment, personal care and health care industries.[2] It operates in more than 30 countries and sells its products in over 100[2], although 69% of 2007 sales came from the United States.[3] In addition to its paper product lines, MWV's Community Development and Land Management Group manages the 952,000 acres of forestland that the firm owns in the U.S. and Brazil.[4] In 2007, the firm sold approximately 393,000 acres of forestland, generating an after-tax gain of $169 million.[4][5]

In 2007, MWV's revenue was $6.9 billion (5.8% gain over 2006) and its 2007 net income was $285 million (206.5% gain over 2006).[6] The large growth in net income in 2007 reflects an after-tax gain of $169 million from the sale of 393,000 acres of U.S. forestland.[4][5]

The other main issue facing MWV is the proliferation of digital technology and its negative impact on the use of paper and packaging products. For example, email is replacing pen and paper memos, and downloaded music is becoming more popular than purchases of CDs in their special injection-molded cases, a specialty of MWV. Because of this trend, 2007 sales growth in MWV's Consumer and Office Solutions segment was stagnant[7], and 2007 net income in its Consumer Solutions division (responsible for injection-molded cases) fell by 8%.[7]

Business Overview

MeadWestvaco, which rebranded itself as MWV in March 2008[8], produces and sells paperboard (a raw material used in packaging), customized and printed packaging, home and office paper products and specialty chemicals that are byproducts of the paper and packaging businesses.[2] Additionally, the firm owns 952,000 acres of forestland in the U.S. and Brazil, strategically managing, buying and selling them to produce revenue.

Financial Metrics

MWV's Revenue, Net Income and Profit Margin: 2005-2007
MWV's Revenue, Net Income and Profit Margin: 2005-2007[6]

The following table[6] shows MWV's revenue and net income, as well as the percentage changes in each, for 2005-2007.

(millions USD) 2005 2006 2007
% change1.8%5.8%5.8%
Net income$28$93$285
% change108%232.1%206.5%

Business Segments

MWV's breakdown of pre-tax profit by business segment
MWV's breakdown of pre-tax profit by business segment[9]

MeadWestvaco is broken down into five reported business segments: Packaging Resources, Consumer Solutions, Consumer & Office Products, Specialty Chemicals and Corporate and Other.

Packaging Resources (42% of pre-tax profit)

The Packaging Resources segment produces paperboard and other raw packaging materials. It is the largest division of MWV, with $3.02 billion in 2007 sales.[10] Customers include producers of media, beverages, produce, cosmetics, tobacco, pharmaceuticals and healthcare products.[10]

Consumer Solutions (11% of pre-tax profit)

The Consumer Solutions segment produces customized and printed consumer packaging for products including CDs and DVDs, cosmetics, beverage and tobacco products. It also produces packaging equipment for sale or lease to other firms.[10] In 2007, Consumer Solutions sales increased 12% to $2.43 billion.[10]

Consumer & Office Products (18% of pre-tax profit)

The Consumer & Office Products division produces school and office supplies under brands including AT-A-GLANCE, Cambridge, Five Star, Mead and Trapper Keeper.[7] This segment's sales increased by less than 1% in 2007, to $1.15 billion, due to decreases in volume (see Trends/Forces below). However, its profit still increased 9% to $139 million due to price increases, changes in the product mix and productivity improvements.[7]

Specialty Chemicals (5% of pre-tax profit)

The Specialty Chemicals section of MWV produces chemicals that are derived from sawdust or other byproducts of the paper-making process. These chemicals include activated carbon for use in vehicle emission-control systems, as well as chemicals used in printing inks, asphalt paving, adhesives and lubricants.[7] Sales in this division remained level with 2006 at $493 million: higher prices were offset by declining volumes due to decreased car production and lower demand in the publication inks industry.[7]

Corporate and Other (-24% of pre-tax profit)

This segment includes all forestry operations, as well as income and charges related to corporate, restructuring, legal and pension matters. The $184 million loss in 2007 was an improvement over the $448 million loss in 2006, largely due to the sale of 393,000 acres of forestland, which brought in a before-tax gain of $250 million.[11]

Key Trends and Forces

Environmental concerns take a toll on MWV's bottom line.

The firm was found to be liable for environmental cleanup costs at certain sites it had used in the past; this cost $21 million in 2007, and the company anticipates that this figure, too, may grow in the years following that.[12] Additionally in 2007, MWV spent $19 million on environmental capital in order achieve its sustainability goals, and it expects this expenditure to steadily increase in the coming years.[12] Without these two expenditures totaling $40 million, MWV's 2007 net income would have been 14% higher.[6]

Changing delivery methods for music and video entertainment reduce demand for some of MWV's specialty packaging.

The Consumer Solutions segment, which contributed 35%[13] of total 2007 revenue, produces the special injection-molded cases used to package CDs and DVDs. Profits in the Consumer Solutions division fell 8% in 2007, to $86M.[7] The proliferation of computer ownership and broadband internet access have changed the way people access media. As opposed to buying music and movies in CD or DVD format, many consumers simply download them over the internet. In fact, Apple's iTunes music store became the top music retailer in the U.S. in 2008, surpassing the 5-billion-song milestone on June 19, 2008.[14] Globally, sales of music on CDs and DVDs fell 13% in 2007, while sales of downloaded songs increased 34%.[15]

Digital communications reduce paper consumption, hurting MWV's Consumer & Office Products segment.

In the world's wealthiest countries, per-capita consumption of paper fell 6% between 2000 and 2005.[16] This trend has hurt MWV's Consumer & Office Products segment, which contributed $1.15 billion of revenue in 2007. This was a gain of only 0.88% over 2006; growth was hampered by declining volume.[7] Similarly, the widespread proliferation of internet access has decreased the demand for consumer paper products in many areas.[16] For example, e-mail is eliminating the need for MWV's paper memo pads, letter paper and envelopes, and people can use calendar software rather than MWV's At-A-Glance brand of calendars.


MWV's competes with other firms that produce paperboard, packaging and paper-based office products. The industry is made up of large companies, with the top four companies shown in the table below. International Paper Company (IP) and Smurfit-Stone Container (SSCC) produce similar product mixes to MWV, while Weyerhaeuser Company (WY) also produces wood products like raw timber.[17][18]

(millions USD) Net Sales Net Income
International Paper Company (IP)$21,890$1,168[19]
Weyerhaeuser Company (WY)$16,308$790[20]
Smurfit-Stone Container (SSCC)$7,420($103)[21]


  1. MeadWestvaco Becomes MWV in Global Rebranding Initiative - Reuters.com 3/24/08
  2. 2.0 2.1 2.2 2.3 MWV 2007 10-K, page 1
  3. MWV 2007 10-K, page 3
  4. 4.0 4.1 4.2 MWV 2007 10-K, page 15
  5. 5.0 5.1 MWV 2007 Annual Report, page 43
  6. 6.0 6.1 6.2 6.3 6.4 MWV 2007 10-K, page 12
  7. 7.0 7.1 7.2 7.3 7.4 7.5 7.6 7.7 MWV 2007 10-K, page 17
  8. MeadWestvaco Becomes MWV in Global Rebranding Initiative - Reuters.com 3/24/08
  9. [MWV 2007 10-K, pages 16-18
  10. 10.0 10.1 10.2 10.3 MWV 2007 10-K, page 16
  11. MWV 2007 10-K, page 18
  12. 12.0 12.1 MWV 2007 10-K, page 25
  13. MWV 2007 10-K, page 16
  14. iTunes Store Tops Over Five Billion Songs Sold - Apple.com Press Release, 6/19/08
  15. CD sales falling faster than digital music sales rise - Bloomberg News/International Herald Tribune, 6/18/08
  16. 16.0 16.1 Pushing Paper Out The Door - New York Times, 2/10/08
  17. Yahoo Finance Industry Center - Paper & Paper Products
  18. Yahoo Finance Industry Center - Lumber, Wood Production
  19. International Paper Company - Hoover's
  20. Weyerhauser Company - Hoover's
  21. Smurfit-Stone Container Corporation - Hoover's
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