Q3 2011 Earnings Call
October 26, 2011 10:00 am ET
E. Mark Rajkowski - Chief Financial Officer and Senior Vice President
John A. Luke - Chairman, Chief Executive Officer and Chairman of Executive Committee
James A. Buzzard - President
Jason Thompson - Director of Investor Relations
George L. Staphos - BofA Merrill Lynch, Research Division
Mark Weintraub - Buckingham Research Group
Mark W. Connelly - Credit Agricole Securities (USA) Inc., Research Division
Alex Ovshey - Goldman Sachs Group Inc., Research Division
Mark Wilde - Deutsche Bank AG, Research Division
Gail S. Glazerman - UBS Investment Bank, Research Division
Phil M. Gresh - JP Morgan Chase & Co, Research Division
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Ladies and gentlemen, thank you for standing by. Welcome to the MWV Third Quarter Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Director of Investor Relations, Mr. Jason Thompson. Please go ahead, sir.
Thanks, Keeley, and good morning, everyone. This morning, we announced our results before the market opened. A notification of this morning's call was broadly disclosed. And further, this morning's call is being webcast at mwv.com. Slides that accompany this call are available there as well. I'll briefly remind you that certain statements we make are forward-looking and are not guarantees of future performance and are subject to known and unknown risks and uncertainties described in our public filings. Furthermore, contents contain time-sensitive information that, although correct today, may change with the passage of time.
All the results we show this morning are presented on a continuing operations basis. For the third quarter, we reported income from continuing operations of $117 million or $0.67 per share. Excluding special items, adjusted income from continuing operations was $121 million or $0.70 per share.
Now here to tell you more about our results for the third quarter are John Luke, Chairman and CEO; Jim Buzzard, our President; and Mark Rajkowski, CFO. I'll now turn the call over to John.
John A. Luke
Thanks very much, Jason, and good morning. For more than 2 years, MWV has delivered consistently higher earnings each and every quarter, reflecting the positive impact of our market-focus strategies in each business. We continued on this trajectory with another very strong performance in the third quarter. Our consistent financial improvement has come against the backdrop of an increasingly challenging economic environment. We have continued to make progress with commercial strategies designed to capture growth in targeted areas and to expand our market share, even in those markets where demand has softened. We have earned new business from customers by helping them attract and retrain -- retain consumers with innovative solutions. And we have capitalized on growth opportunities in emerging markets, such as Brazil and China, where growth is still strongly outpacing developed regions. Overall, we're delivering solid results while dealing with the same economic challenges as our competitors.
Our revenue increased 9%, and we generated record third quarter adjusted income from continuing operations of $121 million or $0.70 per share. Through the first 9 months of 2011, we have already surpassed the record annual earnings we delivered in 2010. Even with 2 uncertain months still ahead of us, this is sure to be another strong year for our company's financial performance. This is largely due to the progress we're making with our market-focus strategies including solid sales performance in our targeted packaging markets for food, beverage, healthcare, personal care, home and garden and tobacco. The dynamics in each of these markets vary, but it's fair to say that all have been impacted in some measure by cost inflation, lower consumer confidence and discretionary spending, specially in developed markets like Europe and North America.
For instance, inflation-driven higher food prices are causing consumers to change some of their buying habits, including choices about where to shop for groceries and which traditional and private label brands to buy. Consumers are also choosing new beverage products and formats over canned beer and soft drinks, and they're purchasing fewer discretionary items in the beauty and personal care categories.
Our participation choices in these markets have been shaped by increasingly deep expertise and diligent work to ensure that we are competing in the most attractive and least volatile categories with innovative products that are vital to our customers' brand identity and growth ambitions. As a result, we're gaining share because of our value proposition and market insights.
We've consistently stated that our performance is not immune to the broader economic trends, and it's not. But we're managing to generate profitable growth in our targeted markets in spite of uncertain and uneven demand. In fact, we have plans to grow our Packaging business even more aggressively in these markets, plans we look forward to showcasing and discussing with investors during the upcoming session we have planned in December in Richmond. During that session, we'll focus on the elements of our growth model, including specific opportunities to improve our partnerships with customers, accelerate our innovation pipeline and expand our leading positions in emerging markets.
Before turning to Jim for more detail about our performance in each business segment, let me summarize by saying that across MWV, we have been executing our strategy and getting results for our shareholders. This strategy has transformed MWV into a global leader in the packaging industry. And our results in the third quarter, building on the success we have had all year, demonstrate not only the return on our strategy, but the confidence we have in our longer-term outlook.