CORRECT: Kodak Posts Loss, Reiterates 2009 Cash, Earns Views
October 29 2009 - 10:45AM
Dow Jones News
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. But it reiterated full-year earnings
and cash targets, saying it expects significant improvement in
fourth-quarter results as end markets improve modestly and it
generates more income from intellectual-property licensing.
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, 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," said Kodak Chairman and
Chief Executive Antonio M. Perez. "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.
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.
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.
Kodak 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.
Shares of Eastman Kodak closed at $3.47 and haven't traded
premarket. They are down 47% this year and had been trading closer
to the low end of a 52-week range of $2.01 to $11.74.
-By Mary Ellen Lloyd, Dow Jones Newswires; 704-948-9145;
maryellen.lloyd@dowjones.com
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