KODAK IN $1-BILLION BUYBACK OF SHARES !

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KODAK IN $1-BILLION BUYBACK OF SHARES !

 user 2008-06-26 at 1:00:48 pm Views: 72
  • #20231
    http://www.domain-b.com/companies/companies_k/Kodak_India/20080625_buyback.html
    Kodak in $1-billion buyback
    June
    2008 In a move not unlike luxury carmaker Daimler’s 6-billion share
    buyback announced last week, 128-year old photography pioneer Eastman
    Kodak has announced a similar $1 billion move, driving its share price
    up the maximum in the last two decades.The buyback is expected to be
    financed by a $581-million tax refund and cash surplus accumulated by
    selling off its medical imaging business last year to Canadian
    investment firm Onex Corp for $2.35 billion.The repurchase programme is
    authorised through the end of 2009.Under the terms of the repurchase
    programme, the company may repurchase shares in open market purchases
    or through privately negotiated transactions.The move underlined
    Kodak’s faith in its makeover as a digital technology company, analysts
    said, and appeared timed to take advantage of a steep slide in its
    stock price to 30-year lows.

    Kodak surged $1.69, or 14 per cent,
    to $14.03 at 4 p.m. in New York Stock Exchange composite trading, the
    biggest percentage gain since 20 October 1987, the day after the Black
    Monday stock market crash. The stock has lost half its value in the
    past five years on declining demand for traditional film products.The
    repurchase accounts for 28 per cent of 288.2 million outstanding shares
    and is the first under CEO Antonio Perez, who has worked to return
    Kodak to profitability through sales of digital cameras and inkjet
    printers. The company may have faced investor pressure to buy back the
    stock, which reached a 12-month low yesterday, say analyst. “Our
    board’s decision to authorize this repurchase initiative underscores
    the rising confidence we have in Kodak’s product portfolio, in our
    current financial position, and in the execution of our strategy,”
    Perez said in a statement.Kodak halted a $2-billion buyback programme
    in March 2001 to pay down debt and make acquisitions as sales of
    traditional film products slowed. Perez completed a four-year
    restructuring program to boost sales of digital products such as
    cameras and a new line of inkjet printers. Kodak has spent $3.4 billion
    to cut 28,000 jobs as demand for its film products continues to drop.

    The
    company has been struggling to turn a profit and in April posted a
    first-quarter loss that was wider than analysts expected because of
    higher material and research costs. The company said in May it will
    raise prices as much as 20 per cent on film, paper, printing plates and
    other items that use silver and aluminum.However, the news hasn’t been
    all bad. After completing a $3.4 billion overhaul from 2004 to 2007,
    Kodak predicted at its annual investor meeting in February that
    revenues would rise 5 per cent a year through 2011, driven by a 10 per
    cent to 12 per cent annual rise in digital sales. Operating profits
    will more than triple to $1 billion, it said.The refund from the US
    Internal Revenue Service resulted from an audit of claims filed for
    1993 to 1998, the company said. It will fund the buyback plan, together
    with cash on hand, and it will boost second-quarter net profit by $574
    million.Way back in 1088, with the slogan “you press the button, we do
    the rest,” George Eastman put the first simple camera into the hands of
    a world of consumers. In so doing, he made a cumbersome and complicated
    process easy to use and accessible to nearly everyone.