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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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