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Kodak Shares Jump After IRS Settlement
ROCHESTER, N.Y.Nov 05 – Shares of Eastman Kodak Co. jumped more than 8 percent Wednesday, a day after the photography-equipment maker reached an income tax-refund settlement with the Internal Revenue Service that will boost its fourth-quarter earnings.
Kodak’s shares, which hit a two-year low last month as it battles through a digital transformation, rose $1.87, or 8.4 percent, to close at $24.02 in trading. They rose another 8 cents in after-hours trading. The company was among the top percentage gainers on the New York Stock Exchange.
The stock climbed as much as 13 percent at one point on more than double its average daily volume.
In a regulatory filing Tuesday, Kodak said it settled a tax dispute that will result in a fourth-quarter gain of $230 million to $260 million, or 80 cents to 90 cents a share. The company expects to obtain the refund either in December or early next year.
Kodak said it also expects the IRS to reverse certain accruals related to an audit covering its taxes from 1993 to 1998. The accruals were established in 1994 in connection with the sale of its pharmaceutical, consumer health and household products businesses, it said.
On Oct. 19, Kodak posted its fourth quarterly loss in a row – which included $900 million in non-cash charges related to its huge overhaul – and its shares tumbled briefly to their lowest level since September 2003. They remains close to the lower end of a 52-week range of $20.77 to $35.19.
Analysts surveyed by Thomson Financial expect on average that Kodak will earn 39 cents a share in the fourth quarter on $4.15 billion in sales.
Earlier this month, in a restatement to correct accounting errors, Kodak widened its third-quarter loss by $9 million to $3.61 a share from a previously reported loss of $3.58 a share.
Kodak acknowledged in fall 2003 that its film-based businesses were in irreversible decline and outlined a strategy to become a digital front-runner in photography, health imaging and commercial printing by 2007.
It embarked on an almost $3 billion shopping spree but also began shutting film, paper and other raw-materials factories around the world. By 2007, its work force could plummet to World War II levels of under 50,000, down from 75,100 in 2001 and a peak of 145,300 in 1988.
By 2008, Kodak expects 80 percent of revenue will come from digital, and overall sales will top $17 billion, up from $13.52 billion last year.
Kodak’s IRS settlement to boost Q4
November 2005 – Rochester (NY): Eastman Kodak has announced a settlement with the Internal Revenue Service that will lift its Q4 earnings by 80 to 90 cents a share.
The agreement concerns the audit of tax from 1993 to 1998 and will provide a boost to Q4 earnings of between $230 million and $260 million, the company said in a US Securities and Exchange Commission filing.
Kodak will also receive a refund of income taxes and interest of approximately $15 million to $25 million.
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