http://www.marketwatch.com/news/story/kodak-shares-sink-22-big/story.aspx?guid={ED1D6EAA-C328-4C66-A585-074A5898B85F}&dist=msr_75
Kodak to cut jobs as it swings to $137 million loss
SAN
FRANCISCO– Eastman Kodak Co. shares dropped 29% Thursday after the
company swung to a big loss in the fourth quarter, bruised by slumping
sales of its digital cameras and other photography equipment, and said
it will cut up to 4,500 jobs.Kodak said it will cut 14% to 18% of its
workforce, or between 3,500 and 4,500 jobs. This adds to prior
cash-conservation actions last month that included freezing the
company’s 401(k) match for eligible employees, a move taken by other
U.S. companies of late.The Rochester, N.Y.-based photo giant also said
none of its executives will get a bonus.Due to the expected
restructuring charges, Kodak is talking to its banks to make sure it
will be in compliance with its covenants tied to its revolving credit
line. The company said it is “comfortable” with its liquidity position
through at least 2009. It ended 2008 with $2.15 billion in cash and
cash equivalents despite much lower cash flow from operations.Job cuts
have been running deep at Kodak , once a Dow Jones Industrial Average
Component. In 2007, it completed a three-year program that slashed the
company’s workforce by 50% to 27,000 employees.
Since this past
fall, Kodak has been hit by the severe slowdown in spending by
consumers and businesses. With credit harder to come by, businesses
have found it more difficult to secure financing for new equipment
purchases, hurting the company’s printer business.Kodak said it lost
$137 million, or 51 cents a share, a big swing from the year-earlier
period, when the company earned $215 million, or 71 cents a share. The
most recent quarter included one-time charges of 42 cents. Revenue fell
24% to $2.4 billion.The company said its 2008 results are preliminary
as it is still determining the value of its goodwill and long-lived
assets. This review could lead to non-cash impairment charges that
could have a “material” impact, the company warned.Kodak shares closed
Thursday at $4.99. The stock has lost 76% over the past 12 months.