MWV Q1 results soar as it pulls out of the recession

By Simon Pitman

- Last updated on GMT

Related tags: Personal care packaging, Thomson reuters

Global packaging provider MeadWestvaco has reported a strong upturn in both its international sales and profits, as it continues to pull away from the difficult times it experienced last year.

During the recession, demand for the company’s products slumped worldwide, as consumers stayed away from the shops, but now the maker of a range of cosmetic and personal care packaging products is moving slowly back towards pre-recession level sales.

The US-based company said that sales for the first quarter ending March 31 increased by 8 per cent to $1.37bn, a figure that missed Wall Street forecasts, which, according to Thomson Reuters, were expected to be in the region of $1.39bn.

However, with the company forecasting further improvements in its future performance during the rest of the financial year share prices still rose on Wall Street to reach a year high.

Profits rocket

Where the company saw the biggest gains was in its reported earnings, which almost tripled from a figure of $24m in the corresponding quarter last year, to reach $65m.

In the consumer solutions division, which largely serves the personal care industry, the company reported a 2 per cent rise in sales, up from $440m to reach $449m for the quarter.

The rise in sales came despite a 1 percent decline in sales volumes, reflecting significant improvements in the areas of pricing as well as product mix.

Volumes for personal care packaging slump

The company said that some of the volume declines were attributable to it performance in the personal care packaging categories, but the company pointed out that this was counterbalanced by gains in productivity and favorable foreign currency exchange.

The specialty chemicals division saw the biggest sales increases, up 28 percent to $177m on the back of significant gains and continued penetration into developed and emerging markets.

Looking ahead to the second quarter of 2011, the company expects to generate increased sales from higher volume and price/mix improvements, while continuing to expand profit margins, compared to the second quarter of 2010.

Related topics: Packaging & Design

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