QUOTE AND NEWS
Benzinga  Feb 6  Comment 
MeadWestvaco Corporation (NYSE: MWV) today announced that it has executed an accelerated share repurchase (“ASR”) agreement with BofA Merrill Lynch and Goldman, Sachs & Co. to purchase $300 million of MeadWestvaco's outstanding common stock,...
SeekingAlpha  Jan 29  Comment 
MeadWestvaco (MWV) Q4 2013 Earnings Call January 29, 2014 10:00 am ET Executives Jason Thompson - Director of Investor Relations John A. Luke - Chairman, Chief Executive Officer and Chairman of Executive Committee Robert K. Beckler...
StreetInsider.com  Jan 29  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Earnings/MeadWestvaco+Corp.+%28MWV%29+Tops+Q4+EPS+by+5c/9099764.html for the full story.
Forbes  Jan 28  Comment 
Analysts have become increasingly bearish on MeadWestvaco in the month leading up to the company's fourth-quarter earnings announcement scheduled for Wednesday, January 29, 2014. The consensus analyst estimate has moved from 25 cents a share to...
Wall Street Journal  Jan 27  Comment 
MeadWestvaco intends to spend $569 million on a special dividend and share buybacks.
Benzinga  Jan 27  Comment 
MeadWestvaco Corporation (NYSE: MWV), a global leader in packaging and packaging solutions, today announced that its Board of Directors has approved the final form of shareholder returns for the remaining $569 million of proceeds from the...
StreetInsider.com  Jan 27  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Dividends/MeadWestvaco+Corp.+%28MWV%29+Declares+%240.25+Quarterly+Dividend%3B+2.8%25+Yield/9091243.html for the full story.
DailyFinance  Jan 20  Comment 
SUMMERVILLE, SC -- (Marketwired) -- 01/20/14 -- The Beach Company and MWV have broken ground on the 320-unit Parks at Nexton apartment community. A joint venture of the two local companies, the Parks is the first residential construction in...
Benzinga  Jan 16  Comment 
In a report published Thursday, Bank of America Merrill Lynch analyst Alexander Wang upgraded MeadWestvaco (NYSE: MWV) to Buy, with a $38.00 price objective. According to the report, MWV's new cost reduction program should result in increased...
StreetInsider.com  Jan 15  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Upgrades/Deutsche+Bank+Upgrades+MeadWestvaco+%28MWV%29+to+Buy+Following+Cost-Cutting+Annoucement/9057945.html for the full story.




 
TOP CONTRIBUTORS


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
Revenue$6,170$6,530$6,906
% 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.

Competition

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]
MWV$6,906$285[6]


References

  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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