MeadWestvaco Corp. (MWV) announced that it now expects profit for the Food & Beverage segment to be between $45 million and $50 million for the second quarter of 2013. 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.
"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," said John A. Luke, Jr., chairman and chief executive officer of MWV.
The company said it continues to expect renewed earnings growth for MWV beginning in the third quarter of 2013 and earnings growth for the full year. The company noted that its growth strategies are gaining momentum, and it is seeing solid demand across its targeted markets.
The company stated that it will release its second quarter 2013 results on Tuesday, July 30, 2013, before the market opens.
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