Westvaco Corp., New York, New York, reported sales for the third quarter ended July 31, 1997, of $738 million, a 3% decrease compared to the third quarter of fiscal 1996. Sales for the first nine months of 1997 were $2.2 billion, also a 3% decline compared to the year-earlier period.

Third quarter 1997 earnings were $38 million, or $.37 per share, a 14% decrease from 1996 third quarter earnings of $44 million, or $.43 per share. Earnings for the first nine months of fiscal 1997 totaled $111 million, or $1.09 per share, a 29% decline from the $157 million, or $1.54 per share, earned during the first nine months of 1996. Earnings for the third quarter and first nine months of 1997 were negatively impacted by $.6 per share due to the rebuilding of a fine papers machine in Luke, Maryland, and the more modest effect of beginning production at a new activated carbon plant in Wickliffe, Kentucky.

"Market conditions gradually improved during our third quarter, extending a trend that began earlier in the fiscal year," said John A. Luke, Jr., chairman and CEO. "Equally important, market indicators point toward more improvement ahead."

However, Luke also noted that difficult challenges persist. For example, prices for linerboard and coated papers remain well below peak levels despite recent improvement.

"While we're experiencing early recovery in our linerboard and coated paper businesses, demand in other segments of our company is good," Luke said. "The market for our Kraftpak(R) unbleached folding carton board remains firm. Likewise, demand is strong for our unbleached saturating kraft products used in decorative laminates. Order backlogs for our Printkote(R) bleached board are holding steady in a comfortable range. Our packaging business in Brazil is poised for improvement, and our envelope division remains a solid performer. In addition, our chemical division's sales are continuing to grow."

Westvaco's Board of Directors has authorized the periodic repurchase of the company's common stock to satisfy issuances under employee stock option plans. In recent years, annual stock option related activity has averaged approximately 900,000 shares, less than 1% of Westvaco's 102 million shares of outstanding common stock.

In other news, the company declared a fiscal 1997 fourth quarter common stock cash dividend of $.22 per share. The dividend was payable on October 1, 1997, to shareholders of record on September 5, 1997. The October payment will mark Westvaco's 408th consecutive quarterly common stock cash dividend.