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 user 2009-11-03 at 11:48:38 am Views: 43
  • #22864


    The Eastman Kodak Company said Thursday it lost $111 million in the
    third quarter, its fourth consecutive quarterly loss, as sales fell 26

    Eastman Kodak Co. (EK) swung to a loss
    in the third quarter as the recession and tight credit markets
    continued to hurt sales of its film, commercial printing supplies and
    digital cameras.
    With a steeper-than-expected 26% drop in sales in
    the latest period, Kodak said full-year sales will decline at the worse
    end of its previously forecast range. And Kodak reiterated full-year
    earnings and cash targets despite a wider-than-expected third-quarter
    loss, saying it expects significant improvement in fourth-quarter
    results as end markets improve modestly and it generates more income
    from intellectual-property licensing.”In general we expect a sequential
    improvement in many of our core lines going into the fourth quarter,”
    said Kodak Chairman and Chief Executive Antonio M. Perez during a
    conference call to discuss results.Shares recently traded 0.43% higher
    at $3.48 after trading lower earlier in the session. Kodak shares were
    down 47% this year heading into Thursday’s results and have a 52-week
    range of $2.01 to $11.74.

    Kodak’s third-quarter loss was $111
    million, or 41 cents a share, compared with a profit of $101 million, or
    35 cents a share, a year earlier. The latest quarter included $48
    million, or 18 cents a share, in restructuring-related charges and other
    items, while the year-earlier period had $40 million, or 13 cents per
    share, in gains.Excluding items, the loss was 23 cents a share, compared
    with a profit of 22 cents a share a year earlier.Revenue fell to $1.78
    billion from $2.41 billion, including a 2% negative foreign-exchange
    impact.Analysts surveyed by Thomson Reuters had expected a loss of 19
    cents a share on $1.89 billion in revenue.

    For the full year,
    Kodak now sees revenue declining at the high end of its earlier forecast
    for a 12% to 18% drop, based on the results to date and an increased
    focus on cash and earnings.But its segment earnings should be within its
    previous forecast, which was a range of break-even to $200 million, and
    Kodak continues to expect a loss from continuing operations under
    generally-accepted accounting principles at the low end of between $200
    million to $400 million.”Our sales are stabilizing and some businesses
    are showing real signs of growth in the fourth quarter,” Perez said.
    “That, combined with operational improvements in several of our key
    product lines, increases our optimism for significant improvement in the
    fourth quarter, our largest quarter of the year.”

    The company is
    counting on a modest improvement in the market for its consumer and
    commercial products, among other things, to achieve that
    improvement.”The challenge for Kodak is that so much does rest on the
    fourth quarter,” said analyst Shannon Cross of Cross Research. “Clearly
    they are expecting to produce a significant rebound.”Kodak said its
    consumer inkjet business gained market share, and it added new
    commitments for its new commercial printing platform, scheduled for
    delivery beginning in early 2010. Digital cameras and other consumer
    products introduced in the third quarter have higher margins and are
    also expected to help.The Rochester, N.Y., company on Sept. 16 said it
    expected its three business segments to post a total operating loss of
    $50 million to $60 million. The company Thursday reported a total
    segment operating loss from continuing operations of $36 million.

    last month raised $700 million: $300 million by issuing notes due 2017
    from Kohlberg Kravis Roberts & Co. and $400 million in senior
    unsecured convertible debt due 2017. As part of that deal, Kodak said it
    would use $575 million of the proceeds to retire $575 million in
    convertible notes, which investors had expected the company to retire in
    2010 using cash balances.That has given the company some financial
    breathing room, despite a potential 35% dilution to existing
    shareholders.While declining to offer many specifics on fourth-quarter
    results so far, Perez said “October was good.”September and October saw
    Kodak’s first improvements in sales of entertainment imaging equipment,
    Perez said, calling the change significant.

    In addition, about
    half of Kodak’s business in the consumer space is generated in the
    fourth quarter, and officials still expect Kodak can generate $250
    million to $350 million in intellectual property royalty revenue for the
    year even though such revenue has been lower so far this year. It cited
    a number of transactions under discussion, but wouldn’t provide
    specifics on the status of negotiations.Kodak late last year filed a
    U.S. trade complaint against Samsung Electronics and LG Electronics,
    seeking to ban imports of mobile phones with digital cameras that Kodak
    claims violate its patents. It has also filed patent-infringement
    lawsuits against the companies seeking cash and other sanctions.

    meanwhile, continues to negotiate with other parties wishing to license
    its technology, executives said.Chief Financial Officer Frank Sklarsky
    and Perez said they believe Kodak’s restructuring efforts since the
    fourth quarter of 2008 will help the company leverage its sales into
    profits as the economy improves. Kodak has cut 4,275 positions since the
    fourth quarter of 2008, has trimmed its product portfolio and remains
    on track to meet or exceed its cost-reduction targets for the year,
    Sklarsky said.Kodak put off questions about longer term financial goals,
    saying it must see fourth-quarter results before it provides a 2010
    update in early February.