Kodak plans

Discussion in 'Kodak' started by William Graham, Jan 22, 2004.

  1. I got this article in one of my market watch newsletters today......


    Kodak (EK: news, chart, profile) plans include shuttering some manufacturing
    sites and reducing operations in some of its traditional businesses. The
    Rochester, N.Y company expects to cut total facility square footage by about
    one-third.
    "These plans are the consequence of market realities, and they will help us
    to fund a future for Kodak of sustainable, profitable growth," said Antonio
    Perez, president and chief operating officer in a statement.
    "They are absolutely required for Kodak to succeed in traditional markets as
    well as the digital markets to which our businesses are rapidly shifting,"
    he said. "We are committed to being the low-cost manufacturer and provider
    in all the markets we serve," the company said.
    A company spokesman was not immediately available to detail where Kodak
    expects the job cuts to take place. Officials are in New York for an
    investor meeting later Thursday.
    Dealers in London said the shares were bid up 14 cents. The stock closed at
    $27.46 on Wednesday, marking a 4 percent gain on the day.
    Kodak is seeking to right foot itself as digital cameras and printers take
    market share from the traditional film and development industry. Kodak is
    cutting costs, slashed its dividend last year and is working to shift
    investment into the digital arena. In July, Kodak set plans to eliminate of
    up to 6,000 jobs over the year.
    On Thursday, Kodak said it's seeking to cut costs by $800 million to $1
    billion by 2007.
    As a result of the job cuts and disposals, Kodak is expecting cash and
    non-cash charges around $1.3 billion to $1.7 billion during the next three
    years. Of that, Kodak said it expects to spend about $700 million to $900
    million on severance-related costs and about $600 million to $800 million
    for the disposal of buildings and equipment.
    Separately, Kodak said net profit in its fourth quarter dropped 83 percent,
    mainly reflecting charges for its restructuring, to $19 million, or 7 cents
    per share.
    Sales surged 10 percent to $3.778 billion over the fourth quarter of 2002.
    Excluding the impact of the weaker dollar, sales rose 4 percent.
    Earnings from continuing operations were 70 cents a share. Stripping out an
    11-cent gain relating to employee-benefit and incentive-compensation
    accruals, Kodak's quarter came in one cent ahead of its outlook for earnings
    of 48 cents to 58 cents per share in the quarter. Analysts polled by Reuters
    Research were expecting operating earnings at 52 cents a share.
    Kodak expects operational per-share earnings to range between $2.25 and
    $2.55 in 2004 and GAAP earnings to range between 80 cents and $1.30, a wide
    range which implies either a decline or an increase over 2003.

    Emily Church is London bureau chief of CBS.MarketWatch.com.
     
    William Graham, Jan 22, 2004
    #1
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  2. If I owned any Kodak stock (which thankfully I never have) this would
    encourage me to sell them. Whenever companies get obsessed with
    accountancy and cutting costs instead of obsessing about making the best
    stuff you know there is a fair chance they are in a death spiral. Sadly,
    IMO Kodak lost the lead in film to Fuji years ago, and never came close
    to gaining it in the digital area.
     
    David Littlewood, Jan 22, 2004
    #2
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  3. William Graham

    Gordon Moat Guest

    It is interesting that they also acquired a large interest in a Chinese film
    production facility around that time. I have stated previously that I commended
    Kodak for maintaining manufacturing and (relatively) expensive labour in the
    United States, but I have always thought there could be even higher profits if
    they would move film production out of the United States.

    I would not be surprised if the current Made in the United States films will
    soon be coming from China. Just on a stock market view, having expensive labour
    and manufacturing in the United States is loosing profits, and moving that off
    shore should boost the company.

    It is sad that what is good for the stock market investors is bad for workers.
    Almost makes me want to look for work in Bangalore.

    Ciao!

    Gordon Moat
    Alliance Graphique Studio
    <http://www.allgstudio.com>
     
    Gordon Moat, Jan 22, 2004
    #3
  4. It's in the works now. By the end of the year, most of the film
    bought in the US will be made in China. It's not the cheap labor that
    drove the decision, it was the taxes. They have a deal with the
    Chinese government.
     
    Donald Sanders, Jan 23, 2004
    #4
  5. William Graham

    Gordon Moat Guest

    Thanks for adding that. Not really surprising, and it definitely makes some US jobs and
    facilities redundant.

    Ciao!

    Gordon Moat
    Alliance Graphique Studio
    <http://www.allgstudio.com>
     
    Gordon Moat, Jan 23, 2004
    #5
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