Posted on 08/01/2006 6:56:48 AM PDT by t_skoz
Kodak posts wider 2Q loss of $282M
ROCHESTER, N.Y. - Eastman Kodak Co., undergoing a tough transition to digital photography, posted a wider loss of $282 million in the second quarter Tuesday — its seventh quarterly loss in a row.
Largely because of $214 million in restructuring costs, Kodak lost the equivalent of 98 cents a share in the April-June quarter, compared with a loss of $155 million, or 54 cents a share, a year ago.
Hurt by a rapid slide in film sales, revenues fell 9 percent to $3.36 billion from $3.69 billion in last year's second quarter.
Excluding one-time items, Kodak lost $54 million, or 19 cents a share.
As it drives for greater profitability from its digital businesses, Kodak said it is shifting manufacturing of its digital cameras to Flextronics Ltd. and transferring about 550 employees to the Singapore-based company.
A photographic film icon during much of the 20th century, Kodak has struggled to turn profits even while becoming a major player in recent years in the digital arena.
Its overall digital sales in the quarter rose 6 percent to $1.83 billion, while revenues from film, paper and other traditional, chemical-based businesses slumped 22 percent to $1.52 billion.
Profits from its digital businesses totaled $4 million, compared with a $25 million loss in last year's second quarter. In 2005, for the first time, Kodak generated more annual sales from digital imaging than from film-based photography and earned $161 million in digital profits.
The company reaffirmed that it expects to post an overall operating loss of $500 million to $850 million in 2006 and earn $350 million to $450 million from digital operations. But it lowered its forecast for digital sales growth to around 10 percent from a range of 16 percent to 22 percent.
"We are coming into the final stages of our digital transformation," said Kodak's chief executive, Antonio Perez. "By the end of next year the majority of the restructuring costs will be behind us and Kodak will be positioned for sustained success in digital markets."
A year ago, the 127-year-old company disclosed plans to lay off 10,000 employees on top of 12,000 to 15,000 job cuts targeted in January 2004. It has already cut 20,500 jobs, including 1,630 in the quarter.
In May, Kodak said it was exploring a partnership, an outright sale or other options for its Health Group, maker of X-ray film, medical printers and other health-imaging products and services. The division had revenues of $2.7 billion last year.
The company acknowledged in 2003 that its analog businesses were in irreversible decline and outlined an ambitious strategy to become a digital heavyweight in photography, medical imaging and commercial printing by 2007.
The transition triggered nearly $3 billion in acquisitions. But the shutdown of film and other manufacturing operations looks likely to drop its global work force below 50,000, down from 75,100 in 2001 and a peak of 145,300 in 1988.
Film and photofinishing sales slumped to $1.15 billion from $1.5 billion a year ago while operating profits dropped to $113 million from $244 million.
Health imaging sales fell 6 percent to $655 million, and operating earnings dipped to $78 million from $109 million, partly because of costs associated with exploring alternatives for the 110-year-old business.
In contrast, graphic communications sales jumped 14 percent to $908 million, driven by its $1.8 billion buyouts of Canada's Creo Inc. and Sun Chemical Corp.'s 50 percent stake in Kodak Polychrome Graphics. Operating earnings reached $22 million, compared with a loss of $42 million a year ago.
Sad to hear about this news from my hometown of Rochester, but it's not surprising.
August 11th will be my 1 year anniversary of my move to New Hampshire. I should have done this years ago.
Best regards to all,
Upstate NY / photography ping.
Neverdem & BLL - can you ping the usual suspects.
CTD, what's up? Give me a call, you know how to reach me...
weegee: FYI and hello!
Wow, they continue to lose money. They should have gotten on the ball faster. They identified plans to go all digital in 2003 and it will take them till 2007 to get there. A good example of a company moving too slow.
Good-morning yesterday...you wake up...and profits have slipped away...
Their digital cameras are selling well, but ultimately they need to expand their line to include SLRs if they want to be a player in this industy.
Regardless, the demise of film is going to continue to be a drag for some time.
They had Kodachrome, a wonderful film that they could command premium prices for. They stopped making it.
They had the K-14 process used for Kodachrome - they refused to license it to anyone else. Thus, pros went to E-6 process films because they could have it processed in less than 2 hours. Kodachrome took 2 weeks.
They have seemingly done everything they can to tick off the pros that are still using film, such as those doing 6x6cm (Hasselblad, Rolleiflex) and larger format film shooting.
Film is dying faster than I ever thought possible.
There are no more commercial users of film. (With the posssible exception of Hollywood.) High volume sales are a thing of the past. Without commercial sales, film production may simply cease.
It may be time to fill the freezer with 35mm film to go with the 127 and similar oddball sizes.
(Go Israel, Go! Slap 'Em Down Hezbullies.)
Film will endure as an "Art" market and as an archival medium for the indefinite future, but that's about it. Certainly nothing big enough to support a Dow-Jones sized company.
Take for example the Olympus FE-140, which is sold around US$160 street price. Good picture quality, built-in compensation for camera shake, and cheap memory cards (you can get a 1 GB xD memory card for around US$60 nowadays) are good reasons why everyone is wanting to get a digital camera anyways. Best of all, you can take the memory card and do the following: 1) copy it to your computer to archive the images either on the hard drive, on recordable CD's or DVD's or upload it to an image online storage site such as Imagebucket, 2) plug it into many printers and directly print pictures from the card or 3) go to a special kiosk found in many supermarket and drug stores and print the pictures on professional-quality paper.
Sure, film will still be around, but they will be primarily either slide film or medium format 6 x 4.5 cm or 6 x 7 cm print film (the medium formats will be used for magazine-quality professional photography).
They did. Actually Kodak was th pioneer in the field of digital slrs. Back in the early/mid ninties they had ~1 mp (nikon mount)slrs selling upwards of $20,000. In the 2000s they tried to catch up with the big fish (Canon/Nikon), but compared to the two their image qaulity was quite poor and weren't selling. A year or two ago Kodak moved out of the slr market for good.
As for chrome film, they were shunned by most pros in favor of Fuji for their higher grain and poorer color palette. I never liked Kodak myself after trying ektachrome once. I can't see what Kodak's strategy is after surrendering film and pro digital slrs.
While I'm not quibbling with these numbers I think it would be good to wait to compare them to FujiCorp, the world's other film giant. It may be that this is a trend that will continue until the switchover to digital is complete. The one big problem for Rochester is that while Kodachrome is made there, Kodak's new cameras are Asian produced. Profits for these new devices will stay in the US, sadly the jobs will not.
Kodak is one of the worst companies when it comes to supporting homosexual agenda and anti-family policies. Social conservatives like myself will always vote with our pocketbooks. If others want to support the liberal agenda then buying products from Kodak and Ford is almost the same as sending a check to Howard Dean.
Well, I bought a Kodak Digital and so far am pleased with it..... After having two Vivitars die on me in under a year....
I'd hate to see this company go under, they are photography.
Four years ago my brother and sister-in-law finally had a belly full of Buffalo and moved to Ohio. She is an MD and he is a college professor.
The State of New York and the federal government allowed them to keep almost fifty cents of every dollar they made.
Just keep raising taxes New York.
They obviously need to unload their US properties and focus on the inexpensive digitals. However, I do think they need to go into digital SLRs. Some of their high end non-SLR cameras are already pushing up against the price tag that would go with an SLR anyway. If they want to nurture their brand name, they need to appeal to serious amateurs who buy in the $500-$1000 range.
They ought to be positioning themselves to be taken over by someone like HP, though. HP has a camera line that really shouldn't exist. If they owned Kodak, they could improve on what they've already got, and be a player in that industry, while at the same time taking ought one of their main competitors.
"After having two Vivitars die on me in under a year.... "
Thats not really saying much - a vivatar is to the camera world as a yugo is to the car world.
Sad, from the inventor of the photo CD. Long before digital cameras.
I'd say a Yugo would be a step up from Vivitar.
I hope Kodak makes this transition successfully. It's easy to take the benevolent giants for granted.
And the local Gannet rag does the same thing to its readers, treating them as if they're in some 4th grade good citizenship class, instead of intelligent adults.
I still buy Kodak products to support my fellow Rochesterians, but had to stop reading that simpleton newspaper.
I agree. They quit making Royal Gold, the best print film I've ever used, and I can't find any 50ASA film either. I don't shoot a lot of film anymore, but I do have a 35mm P&S that has a fabulous lens, carries in my pocket, shoots in the dark, and can fire reasonably fast.
There are some things I still like to use film for, but its pretty much all Fuji now. Before 5 years ago, it was Fuji only for above 400ASA and Kodak at or below.
"I still buy Kodak products...."
Well if you support Kodak you might as well send a check to Howard Dean and the democrat party. You may think that your supporting the workers but actually your just supporting a company fosters the liberal agenda and primarily supports democrat and liberal republican candidates. Kodak probably tops the list when it comes to supporting anti-family poliicies.
Thanks. I'm going out right now and buying a couple hundred bucks worth of Kodak film and cameras. Howard Dean, enjoy the money!!
August 11th will be my 1 year anniversary of my move to New Hampshire
sorry to lose you - but I cant blame you one bit - Im tired of living my life in six month increments and jamming the weeks full those other six when the weather is nice
Kodak is all but dead - the victim of Kay Whitmores senility and an employee mindset that felt it deserved inordinately high pay for blue collar work (later outsourced)
My FIL worked with him for decades - and about 10 yrs ago we bumped into him at all places...a Homestyle Buffet
but three tihngs makes me sick - and ive lived here my whole life....
The disgusting tax level, Chuckie S and Hillary
That was not the case in the 1970's.
and Zweigles hot dogs, of course.
Professional photography for the magazines is mostly slide.
I have a Kodak EasyShare camera. It's nice, I like it too. I miss Rochester, but not as much as I enjoy New Hampshire.
The only problem I have had with the EasyShare software is that when I have my memory stick in and try to use the software it doesn't ever initialize and pull the pictures down... somehow the memory stick confuses the software or something.
I just bought the docking station when I got the camera.. but will upgrade to the station with the printer built in sometime in the future I am sure.
Hi Rev911!
Things I miss about Upstate NY:
-Finger Lakes Region (Hemlock and Canadice)
-White Hots
-Garbage Plates
-"Hot Sauce" (meat sauce)
-all of the parks in Rochester!
-Honeyoe Falls Custom Brewcrafters
-Wegmans
Things I don't miss:
-George Pataki
-the NY Assembly
-liberals
-Hillary!
-Elliot Spitzer
-gun laws
-taxes
EK took a hit today. Speaking of Rochester, is Xerox still in business?
What operating system do you use? In Windows XP it sees my EasyShare as a removable device much like a thumb drive. I don't even use the Kodak software, I just open the device as a folder using My Computer and then drag the pictures to another local folder. Then I edit them with PhotoShop.
Try that, it works well and you don't have to use the bulky Kodak software.
last time I checked they hadn't taken the red X off of that building downtown...
:-) hehehe
Yes, it sees the memory of the camera as a removable drive.. but if I have my memory stick pluged in and try to start transfering using easyshare... it just hangs in initialization mode... something about having my memory stick plugged in and asking EasyShare to transfer just throws it into a loop.
Not a biggie, and I haven't called of researched the problem, so there may be a simple solution.. but I just unplug my memory stick and it works, so no biggie.
try bypassing the EasyShare software and accessing the camera as a folder in My Computer.
Oh I know I can do that... but like just docking the thing and clicking the button, easier for my wife to do stuff that way.
That depends on the magazine. If you're talking a fashion magazine or a specialist magazine that requires high-quality color pictures, then they usually go with at least a 6 x 4.5 cm medium format camera.
Fuji has totally ate their lunch. Kodak is to photography what GM is to autos.
Most of it is product photography - say, a table with plates and something appetizing on them - 4x5 slide, medium format at absolute minimum. And that field is reasonably stable against digitals until there are full field sensor chips with hundreds of megapixels or even in gigapixel range.
Medium-format film cameras will be around a long time because ISO 64 to 100 print film on a 6 x 4.5 cm frame produces very sharp photos with virtually no grain, thanks to the sheer size of each frame on the negative. That's why they're very popular with people who do work for the likes of Architectural Digest, Traditional Home, and serious fashion magazines like Elle. Interestingly, Playboy magazine's own photographers use mostly 6 x 4.5 cm and 6 x 7 cm medium format cameras, plus the use of a big view camera for centerfold shots; I believe Playboy has actually published a book on the type of cameras they use.
The place where digital cameras are making huge inroads is with news photography, where getting the picture ready for newspapers and websites quickly is very important. That's why at sporting events, breaking news events, and at entertainment industry events most of the news photographers and paparazzi carry digital SLR's with about 8 to 12 megapixel resolution nowadays.
talk about it... I'm a Hassy shooter.
I don't keep up with the world of photography, but I could tell they didn't move quick enough. They needed to do what they are doing now 4 or 5 years ago. It may be too late, they were fossilized almost overnight it seems. I remember when digital cameras first took off and thinking how it would be devastating to companies who's living was in film and 'regular' cameras. I recall thinking that those companies better jump into the digital age and be out in front with their brand names or risk being destroyed by the change.
It appears Kodak chose the latter. They are going the way of the newspaper.
Eventhough I'm not passionate about those issues in particular, I have to seriously question their overall motives when it comes to what their world view is, and what political candidates/parties they feed money to. I'm going to look into this. If true, they won't see a dime from my household.
Ironically I talked to a Kodak camera imager designer minutes before getting your ping. Sad to see the ongoing shrinkage.
I used to work at Kodak. They didn't take digital photography seriously enough soon enough - now they're trying to catch up. Kinda hard for a company that made billions in chemical consumables, and suddenly has to master the polar opposite of digital capital equipment.
1AM. Must sleep. Keep me informed. Call me, t_.
I got a Kodak digital camera, 3.2 meg that is about 2 1/2 years old. I thought Kodak did a great job on it. The software that came with it was a joke though.
The big thing about digital photography is that taking pictures is free. So you take lots and lots of pics, and somewhere in there you have a few that are worth printing and putting into your album for posterity
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