ARE KODAK PRINTER SALES DOWN ?
ARE KODAK PRINTER SALES DOWN ?
2008-12-12 at 11:14:52 am #20850
Kodak Falls to Lowest in 34 Years After Forecast Cut
08 — Eastman Kodak Co. fell to its lowest price in at least 34 years
on the New York Stock Exchange after cutting its 2008 sales and profit
projections for the second time in six weeks.The Rochester, New
York-based company said it plans to intensify its focus on cash
generation and reduce costs. Executives won’t receive a salary increase
next year, where permissible by law, and Kodak will suspend its 2009
match for 401(k) retirement savings plans in the U.S., according to a
statement today.A deepening global recession and changes in the value
of the U.S. dollar have threatened sales at the 128-year-old
photography company as it tries to reshape itself for the digital age.
The cuts kindled doubt about the success of Chief Executive Officer
Antonio Perez’s four-year restructuring, concluded in December 2007,
that eliminated 28,000 jobs and invested more in digital products as
demand waned for traditional film.
Kodak dropped 61 cents, or
8.5 percent, to $6.59 at 4:02 p.m. in New York Stock Exchange composite
trading, its lowest closing value since at least January 1974, as far
back as Bloomberg data go. The shares are down 70 percent this year.“I
fully believe further restructuring will be needed,” said Shannon
Cross, an analyst at Cross Research in Livingston, New Jersey. “Their
biggest challenge is cash flow. They’ve pulled their cash guidance for
this quarter and are facing competitors with a stronger cash position
and better access to liquidity. To help offset this, they’re going to
need to trim spending somewhere.”Cross recommends selling the stock and
predicts the company will announce additional cost reductions in
January or February. She estimates Kodak has about $1.8 billion in cash
with $1.3 billion in debt.
has seen the dramatic slowdown in consumer spending continue and
worsen” in recent weeks, while commercial customers were finding it
“increasingly difficult to secure financing” for new equipment
purchases, Kodak said. The company withdrew its second-half and
full-year sales and profit predictions, and didn’t provide new
figures.“There is an unprecedented amount of uncertainty surrounding
the economic environment and most signs indicate that we may be facing
a prolonged global recession,” Perez said in the statement.Changes in
the dollar’s value have also hurt earnings and sales, the company said.
In 2007, Kodak derived more than half its revenue from outside the U.S.
Since Sept. 22, the dollar has advanced 13 percent against the euro,
making U.S. exports more expensive for overseas buyers.Kodak is
suffering from slowing demand for digital cameras and printers and
order cancellations in its printing business. Mounting unemployment, a
lack of credit and falling property and stock values have helped push
the U.S. economy into a recession. This may be the worst holiday
shopping season in six years, according to the National Retail
Kodak’s fourth quarter typically
produces more sales than any other. The company forecast its third
straight annual sales decline Oct. 30, and said it would eliminate more
jobs. At the time, Kodak sliced its operating profit forecast in half,
to a range of $200 million to $250 million, and said 2008 sales would
drop by as much as 5 percent, after previously predicting a gain of as
much as 2 percent.“They’re covering their backsides, making sure that
people are not surprised at how bad the quarter’s going to be,” said
Rusty Robinson, a Kodak shareholder and president of Brentwood,
Tennessee-based Robinson Investment Group, which oversees about $102