Hang on, the numbers say that Kodak's film division makes good money.

[vdonovan]

Someone said in another thread that most of Kodak's profits come from film. The most recent Kodak financial press release shows that this is true. Even though film sales were down, profits were up in the film division last quarter:

"Fourth-quarter earnings from operations [of the Film, Photofinishing and Entertainment Group] increased to $39 million from $17 million in the year-ago quarter. "

It's digital that really fell off a cliff and is posting a big loss:
"Fourth-quarter loss from [the Consumer Digital Imaging Group] was $40 million, compared with earnings of $91 million in the year-ago quarter. "

If Kodak didn't have a film division, their overall corporate loss would be even bigger than it is. AND film actually delivered profits even through sales decreased. Somewhere, the vice president of the Kodak film division is firing up a big fat cigar. His job is secure for a few more years.

http://www.kodak.com/eknec/PageQuerier.jhtml?pq-path=2709&pq-locale=en_US&gpcid=0900688a80a51309

 

[ruben]

Ok, I am pissed off! am going to check what about Foma !

 

[FA Limited]

read some of the fuji discussion
http://rangefinderforum.com/forums/showthread.php?threadid=69392

 

[bmattock]

Someone said in another thread that most of Kodak's profits come from film. The most recent Kodak financial press release shows that this is true. Even though film sales were down, profits were up in the film division last quarter:

"Fourth-quarter earnings from operations [of the Film, Photofinishing and Entertainment Group] increased to $39 million from $17 million in the year-ago quarter. "

You did not post what came next - why the number was increased. Come on, be honest - why was the number up?

Oh, they said why.

They cut costs. They had to. If sales decline (they did) and prices do not rise (they did rise, but not by much), then costs have to drop.

And how did they cut those costs?

Layoffs. Cuts in benefits. Cuts in benefits paid to retirees. They even went back and decided to change how they depreciated the cost of their factories over time, to get a few more years use out of them (they had previously depreciated them to zero, end of life).

That's called burning the furniture for firewood. You can do it once, maybe a couple times. Then you can't do it anymore.

The 'profit' as you call it, is illusory. It is paper tricks, smoke and mirrors.

The tale is simpler and easier to understand. Revenue declined some 27%, while digital revenue declined 24%. That's better than Fuji - their film division dropped over 40% in revenue.

What will they do next year, if they had to do this to 'make a profit' this year? They can lay off more employees, but they're down to the bone now. Soon, they'll affect production of the product they can sell. They can't keep cutting benefits to retirees, and they can't keep changing how they depreciate their factories.

And in the end, EK stock dropped like a rock today.

http://finance.google.com/finance?client=ig&q=EK

Kodak is one company, after all. Film, digital, they will sink or swim as one company.

And if they spun off film, since it 'makes a profit'? It still has 30% declining sales, year-on-year. That hasn't changed. So it drops, and drops, and drops, and then...nada.

And Kodak responded to the news by announcing another round of employee firings. From a high of something like 148,000 employees, they now have something like 14,000, and they're letting another 10 to 12 percent go.

Nobody in Rochester is wearing a big happy hat tonight.

 

[dfoo]

They even went back and decided to change how they depreciated the cost of their factories over time, to get a few more years use out of them (they had previously depreciated them to zero, end of life).

You do realize that, again, this makes zero sense right? Among other things GAAP does not permit that.

 

[Pickett Wilson]

dfoo, if you are an investor in EK, the only think that matters is:

"ROCHESTER (AP) — The Eastman Kodak Company said Thursday it was cutting 3,500 to 4,500 jobs, or 14 percent to 18 percent of its work force, as it posted a fourth-quarter loss of $137 million on plunging sales of both digital and film-based photography products. Its stock tumbled nearly 30 percent."

Which is why the stock tanked.

 

[dfoo]

I'm not disputing that.

 

[bmattock]

You do realize that, again, this makes zero sense right? Among other things GAAP does not permit that.

http://www.streetinsider.com/Press+...dress+Impact+of+Global+Recession/4339384.html

In the first quarter of 2008, the Company performed an updated analysis of expected industry-wide declines in the traditional film and paper businesses and its useful lives on related assets. This analysis indicated that the assets will continue to be used in these businesses for a longer period than previously anticipated. As a result, the Company revised the useful lives of certain existing production machinery and equipment, and manufacturing-related buildings effective January 1, 2008. These assets, which were previously set to fully depreciate by mid-2010, are now being depreciated with estimated useful lives ending from 2011 to 2015. The change in useful lives reflects the Company's estimate of future periods to be benefited from the use of the property, plant, and equipment. As a result of these changes, for full year 2008 the Company reduced depreciation expense by approximately $107 million, of which approximately $95 million benefited pretax earnings from continuing operations. The net impact of the change in estimate to earnings from continuing operations for the three months ended December 31, 2008 was an increase of $26 million, or $.09 on a fully-diluted earnings per share basis.

Bam. Tell it to the IRS, I didn't make the rules.

As well:

Fourth-quarter earnings from operations for the segment increased to $39 million from $17 million in the year-ago quarter. These earnings results were driven by significant cost reductions, and reflect the impact of previously announced changes in post-employment benefits, and lower depreciation expense related to the company's previously announced change in useful life assumptions.

Just as I said. They 'made a profit' by cutting retiree benefits and jiggering the books. One-time deal, for the most part.

 

[Pickett Wilson]

Or, that "In all of 2008, Kodak earned $339 million, or $1.20 a share, down 50 percent from $676 million, or $2.35 a share, in 2007."

That's a 50 percent drop in one year. Doesn't really matter what division is doing what. They can't survive very long with this kind of performance.

 

[Keith]

I'm not suprised they can't make any money out of digital. I've had three Kodak digitals and none of them have lasted beyond a year or so. My current Canon A620 P+S which I've had for three years has been dropped several times and generally treated very poorly ... but it just doesn't quit.

Kodak make great film!

 

[Pickett Wilson]

I miss Polycontrast III.

 

[dfoo]

These assets, which were previously set to fully depreciate by mid-2010

(they had previously depreciated them to zero, end of life).

There goes that precision again... You can see how its hard to follow your shifting, mostly imprecise reasoning, right?

 

[bmattock]

There goes that precision again... You can see how its hard to follow your shifting, mostly imprecise reasoning, right?

We are now in FY 2009. It would have been the last year for depreciation - meaning it has (or would have) gone to zero.

And it's picking nits. My points are correct and you know it.

 

[Rey]

This may sound counter intuitive, but I think that Kodak is on the right track. There is a market for film, there are still millions of film users out there. Unfortunately, it's not the market it was a decade ago, when there were hundreds of millions of film consumers. So what is Kodak to do, they have to keep cutting down costs until they hit an equilibrium, that is until the amount of film they produce comes close to matching consumption. What has to happen is that digital has to stop eating into film consumption, which should happen soon, especially in this world recession. Anyone in China or latin america who could almost afford digital last year (including camera, computer, printer, ink, and software, will likely be unable to make the jump now. The question is, will Fuji and Kodak (as film giants) be able to hang on until they can reach the equilibrium point, or will their debts overwhelm them, like Agfa? It would also be nice to see a breakdown as to what films are selling and what not, especially in terms of Black & white vs. color, print vs. slide. I wonder how some of the smaller B&W specialty film producers are managing?

 

[George S.]

Just about every company is cutting costs in exactly the same way Kodak is. Every company does it once or twice if they are able to. No big news or "the end is near" hysterics here. They still made money. Good. Maybe they won't make money in five years, maybe they will. Film will be a smaller market with higher prices which may actually help the profit potential, as already stated they've long since paid for the R&D and the equipment.

The auto makers are losing billions each quarter, not making money as Fuji and Kodak are and are cost-cutting in even more drastic ways, but cars will still be available in 5 years, nobody's disputing that. I know that the cars and film industries are not the same, but at least film is still making money for the firms. Let's not overlook that fact and presume Kodak and Fuji are dead.

 

[bmattock]

They still made money.

http://www.allheadlinenews.com/articles/7013899501

In the quarter, Kodak swung to a loss of $137 million, or 51 cents per share, compared to its profit of $215 million, or 71 cents per share, in the year earlier period. The net loss also included one-time charges of 42 cents.

I'm sorry, they lost money, they did not make money. EK is one entity. EK lost 137 million dollars in the 4th quarter of 2008. That's all there is to it. Their stock tanked.

When the books are tallied, what one division inside Kodak did versus another doesn't matter - it is Eastman Kodak as an entity that makes a profit or loss.

 

[Gumby]

Just about every company is cutting costs in exactly the same way Kodak is. Every company does it once or twice if they are able to. No big news or "the end is near" hysterics here. They still made money. Good.

Good for who... the execs who will get a big bonus, or the workers who are standing in unemployment lines trying to get some financial support from another bankrupt system?

 

[Gabriel M.A.]

McDonald's profits are up. This means this is the beginning of the end for vegetables!!

No, wait: vegetable profits are up. This mean it's the beginning of the end for McDonald's!

Points for the one who can spot a flaw in either argument.

 

[Gumby]

Points for the one who can spot a flaw in either argument.

Perhaps the flaw is that one can get just as good of a look into the future with a magic-8 ball as with the crystal balls we now use???

 

[Gabriel M.A.]

Perhaps the flaw is that one can get just as good of a look into the future with a magic-8 ball as with the crystal balls we now use???

Well, plastics nowadays have well-known carcinogenics, and crystal is made with lead, so either one is really really bad :bang: