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MeadWestvaco sees Q2 Food and Beverage profit to decline to $45M-$50M

MeadWestvaco announced an expected second quarter 2013 segment profit range for the Food and Beverage business segment of between $45M-$50M. The decline in year-over-year performance largely resulted from unanticipated costs and lower productivity associated with a planned major maintenance outage and subsequent start-up issues at the Covington, Va., paperboard mill. Operational impacts related to the implementation of a new information system at the mill also negatively affected segment profits. The start-up issues associated with the outage have been addressed, and the mill is now operating at full capacity. The company said, “While we predicted and communicated that the planned Covington outage would impact Food & Beverage segment results, the outage itself was protracted, and after completion we continued to experience unfavorable manufacturing variances. The mill is back to running normally and volumes in June are strong. The operational challenges related to the new system are being remediated and are expected to have minimal impact moving forward. Looking ahead, we continue to expect renewed earnings growth for MWV beginning in the third quarter of 2013 and earnings growth for the full year. Our growth strategies are gaining momentum, and we are seeing solid demand across our targeted markets.” MWV will release Q2 results on Tuesday, July 30, before the market opens.