BUSINESS MEMOS: REPORTS 1996 EARNINGS

Westvaco Corp., a major manufacturer of paper, packaging and specialty chemicals, today reported fiscal 1996 third-quarter and nine-month sales and earnings. Sales for the third quarter ended July 31, were $758 million, an 11.3 percent decrease compared to the year earlier period. Sales for the first nine months were $2.3 billion, down 5.6 percent from the first nine months of fiscal 1995.

Third-quarter earnings were $44 million, or 43 cents per share, a 44 percent decrease from record 1995 third-quarter earnings of $78 million, or 77 cents per share. Earnings for the first nine months totaled $157 million, or $1.54 per share, representing an 18 percent decline from the $192 million, or $1.90 per share, earned during the first nine moths of 1995. Earnings for the third quarter and first nine months of 1996 were reduced by 6 cents per share because of planned manufacturing improvements that temporarily interrupted production at Westvaco's bleached board mill in Covington, Va., and unbleached paperboard mill in Tres Barras, Brazil.

John A. Luke Jr., chairman and chief executive officer, noted that since last fall, the entire U.S. paper industry has faced very challenging market conditions due to a combination of factors. Demand for paper products weakened just as customers had accumulated unusually high product inventories and as new manufacturing capacity came on line.