UPDATE 2-MeadWestvaco profit drops; sees better 4th quarter

Tue Oct 23, 2012 8:43am EDT

* Third-quarter net 28 cents/shr vs year-ago 67 cents

* Adjusted profit 39 cents/shr, matching expectations

* Sees higher fourth-quarter profit

Oct 23 (Reuters) - Packaging company MeadWestvaco Corp reported a sharp drop in third-quarter profit on Tuesday as higher prices were offset by unfavorable foreign currency exchange rates and decreased income from land sales.

The company forecast higher fourth-quarter profit, boosted by growth in its packaging and specialty chemicals businesses and significantly lower mill outage costs.

Third-quarter net earnings fell to $51 million, or 28 cents per share, from $117 million, or 67 cents per share, a year earlier, the Richmond, Virginia-based company said.

Excluding restructuring charges, income from continuing operations was 39 cents per share, in line with analysts' average estimate, according to Thomson Reuters I/B/E/S.

Sales were $1.40 billion, little changed from a year earlier.

Overall volumes grew about 3 percent, led by gains in markets for corrugated packaging in Brazil, retail food and beverage packaging in North America, and healthcare packaging.

The company said foreign currency exchange reduced earnings by $20 million, and income from land sales fell to $35 million from $53 million a year earlier.

For the fourth quarter, MWV said it expects earnings from continuing operations to be well above year-ago levels.