Interesting Counterpoint on Kodak Turnaround

[bmattock]

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Misplaced Enthusiasm Over Kodak

By DAN DORFMAN
December 16, 2005

In November of 2003, corporate raider Carl Icahn picked as his latest prey photographic biggie Eastman Kodak, a one-time institutional darling that had fallen on hard times. The shares were then trading in the low $30s when the raider announced he had gotten regulatory approval to buy a large stake in the company. That, in turn, touched off a wave of takeover speculation and not surprisingly pushed the stock price a bit higher.

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Noting that Kodak has missed consensus earnings estimates in each of its last two quarters and has stopped giving guidance for future periods - both clearly negative signs - the newsletter is urging subscribers to short the stock (a bet its price will fall).

Kodak's chief problem, it points out, is its inability to make a successful transition from its rapidly declining traditional film business to the next big thing, digital products and services.

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But its traditional businesses, which account for half its revenues, keep dwindling. Yet another blow: the impending switch by movie theaters to digital equipment.

I tend to think that Kodak is going to make this tight corner and survive; I think they're making all the right moves now. I hope it is not too late, I'd hate to see Kodak go. However, it is a thought-provoking article.

Best Regards,

Bill Mattocks

 

[Bryan Lee]

Kodak as a film company is dead. I understand they will discontinue all paper for black and white in 2006. They are busy now selling their overpriced film labs here in South East Asia when they already know the market will not sustain more film labs of the traditional kind. At the recent Thailand Photo Fair they had all digital cameras and a huge booth with little if any intrest from the public. Companys like Fuji on the other hand have offered small labs that can be set up for a small investment which can directly print from digital input. While it assured that the members of this forum will continue to use film the writing is on the wall for the consumer market. Every tourist I see lately is sporting a new digital camera and the Asians around citys here are all wired up and digitaly connected probly more than in America. Every other phone here has a camera installed on it also. 3 years ago when I was shopping around Bangkok for cameras and looking around in camera shops for older stuff there were plenty of analog cameras. Recently the same stores were emptied of there analog stock and replaced by 2 to 5 hundred doller point and shoot digital cameras. I hang out around a old camera repair shop where the owner has been in business for 35 years, 3 years ago some Japanese came and bought every working secondhand camera that he had and hes only sold about ten since then. He is a very old man holding prime realestate worth millions of dollars on a busy street but he refuses to sale digital cameras. His daughter and me recently had a long conversation about it and came to the conclusion he is just to old to change and he would prefer to die in his comfort zone holding onto the past. Kodak is about the same, A toothless lion.

Maybe well be better off if they just give up and sell some of their black and white brands off to some Polish, Indian or Vietnamese chemical company so we can get the same qaulity of stuff at a reasonable price. Its not like they are spending money on researching new black and white products of the traditional type. I just spent 15 minutes looking at their current website only to conclude they no longer consider me a valued customer.