Solinar
Analog Preferred
No surprise here - Kodak's traditional film and photofinishing sales continue to slide.
"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."
This is from a AP - Forbes news story.
My take on the story is digicams aren't paying the bills and the restructuring costs, 214 million USD, are running pretty high. Film and photoprocessing sales are still more than 40% of total revenue. Film and chemical sales are down 22% from the previous year.
Second Forbes AP article
"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."
This is from a AP - Forbes news story.
My take on the story is digicams aren't paying the bills and the restructuring costs, 214 million USD, are running pretty high. Film and photoprocessing sales are still more than 40% of total revenue. Film and chemical sales are down 22% from the previous year.
Second Forbes AP article
aad
Not so new now.
I understand they're outsourcing camera production. So all they will actually do is make film, paper and printing stuff.
dmr
Registered Abuser
I always had the impression that quite a bit of Kodak's business was in such fields as industrial (chemicals, imaging, Kodalith, etc.), medical (x-ray film and such), military (imaging), and cinema (Eastmancolor and release prints).
None of the many reports I heard today seemed to even mention these.
None of the many reports I heard today seemed to even mention these.
Phoenix Phil
Established
I believe that Kodak divested the chemicals and other products into other divisions or companies. So the Kodak that is typically reported is only on their photographic business. I believe if you look up Eastman Chemicals, you will see the industrial chemicals that you were referring.
J
jern
Guest
To quote, "With sales of $14.3 billion in 2005, the company (i.e. Kodak) is committed to a digitally oriented growth strategy..."
http://phx.corporate-ir.net/phoenix.zhtml?c=115911&p=irol-irhome
The cost of silver is also affecting Kodak's bottom line. A news release (5/22/06) announcing price increases for analog photo products noted, "Over the past several years, Kodak has been absorbing unrelenting increases in the costs of raw materials used to manufacture photographic paper and chemistry, including pulp, silver and petrochemicals."
http://www.kodak.com/eknec/PageQuerier.jhtml?pq-path=2709&pq-locale=en_US&gpcid=0900688a80526283
Not to start a "film is dead" debate, but, as far as Kodak is concerned, its analog photography products are dying and are being managed for any remaining cash in the market.
At Kodak's 2005 Annual Meeting, while lauding film as "the most enduring and most elegant technology of the last century", Antonio Perez, (President & COO of Kodak), noted that "Film is now in secular decline. The world is moving rapidly to digital technologies and Kodak - the most trusted name in the business - has to help guide that evolution. That is, simply, what the new strategy is all about."
http://www.kodak.com/US/en/corp/pressCenter/cpq2005annual.jhtml?pq-path=2509/2882/7295
Kodak has reported that its traditional products lines comprise 46% of its income.
http://phx.corporate-ir.net/phoenix.zhtml?c=115911&p=irol-irhome
The cost of silver is also affecting Kodak's bottom line. A news release (5/22/06) announcing price increases for analog photo products noted, "Over the past several years, Kodak has been absorbing unrelenting increases in the costs of raw materials used to manufacture photographic paper and chemistry, including pulp, silver and petrochemicals."
http://www.kodak.com/eknec/PageQuerier.jhtml?pq-path=2709&pq-locale=en_US&gpcid=0900688a80526283
Not to start a "film is dead" debate, but, as far as Kodak is concerned, its analog photography products are dying and are being managed for any remaining cash in the market.
At Kodak's 2005 Annual Meeting, while lauding film as "the most enduring and most elegant technology of the last century", Antonio Perez, (President & COO of Kodak), noted that "Film is now in secular decline. The world is moving rapidly to digital technologies and Kodak - the most trusted name in the business - has to help guide that evolution. That is, simply, what the new strategy is all about."
http://www.kodak.com/US/en/corp/pressCenter/cpq2005annual.jhtml?pq-path=2509/2882/7295
Kodak has reported that its traditional products lines comprise 46% of its income.
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J
jern
Guest
dmr said:
"In the motion picture industry, a majority of filmmakers continue to choose film over current digital alternatives. They feel it still offers superior imaging and archival characteristics...
As testimony to Kodak's presence in this market, every movie nominated for the Oscar for 'best picture' of 2005 was recorded on Kodak film. In fact, since the Academy Awards were first given in 1928, every 'Best Picture' has been shot on Kodak film."
http://www.kodak.com/US/en/corp/annualReport05/index.jhtml?pq-path=8992
Solinar
Analog Preferred
Restructuring costs, i.e. transitioning to digital, has resulted in seven straight quarterly losses at Big Yellow.
My take on Kodaks position is they are too big to continue in the film and photoprocessing business. They need volume to continue in that arena and that ain't going to happen.
At the same time, their corporate marketing strategy hasn't exactly been hitting homeruns in the digital arena. Their digicams are unremarkable. The cameras seem to be geared towards Walmart where there is competion from Canon and Sony, amongst others. There big push on those on-demand print kiosks frankly doesn't match the quality from a Fuji Frontier.
My take on Kodaks position is they are too big to continue in the film and photoprocessing business. They need volume to continue in that arena and that ain't going to happen.
At the same time, their corporate marketing strategy hasn't exactly been hitting homeruns in the digital arena. Their digicams are unremarkable. The cameras seem to be geared towards Walmart where there is competion from Canon and Sony, amongst others. There big push on those on-demand print kiosks frankly doesn't match the quality from a Fuji Frontier.
J
jern
Guest
Solinar said:
Kodak 2005 Annual Report...
"According to the market research firm IDC, Kodak retained its #1 U.S. market position in digital still cameras in 2005, increasing our lead over the next closest competitor. Worldwide, we ascended to the #2 position. We were also:
• #1 worldwide in snapshot printers, competing against the specialized printer companies.
• #1 in retail photo kiosks, with nearly 75,000 installed worldwide - far ahead of our nearest competitor.
• #1 in online services with the Kodak EasyShare Gallery, which today has more than 30 million registered members."
Solinar
Analog Preferred
# 1 in Easy Share snap shot dye-sub printers, whoopee. I know the strategy. Kodak will make a killing on paper and ribbon. The same strategy holds true for those 75,000 kiosks. They are dye sub printers also.
That and the profit margin in being #1 in P&S digicams obviously hasn't erased seven quarters of red ink. Maybe Big Yellow has finally turned the corner. Maybe they haven't.
That and the profit margin in being #1 in P&S digicams obviously hasn't erased seven quarters of red ink. Maybe Big Yellow has finally turned the corner. Maybe they haven't.
J
jern
Guest
Solinar said:
"I am confident the end of restructuring is now in sight. In fact, 2006 and 2007 should be the last full years of substantial restructuring activity."
(Expect losses through at least the end of this year and perhaps next year.)
"For the second consecutive year, we captured the highest rankings in two of four price segments in the J.D. Power and Associates Digital Camera Satisfaction Study. The two segments, $200 - $399 and $199 or less, comprise more than 85% of the U.S. digital camera market, according to NPD Techworld..."
(I wouldn't ignore command of "more than 85% of the U.S. digital camera market")
"Industry buzz was also strong for the new Kodak photo kiosk G4. It features wireless input of images from digital cameras and camera phones, provides four-second printing and is 30% lighter and smaller than previous models - giving retailers an attractive alternative to minilabs for digital printing.
In fact, to meet growing demand for thermal prints from our kiosks and printer docks, we added manufacturing capacity for thermal paper and media at our plant in Windsor, Colorado. Additional capacity will be operational this year in Rochester, New York."
(I guess general consumers just want their pictures printed.)
All from 2005 Annual Report / Antonio M. Perez Chairman and Chief Executive Officer
Pherdinand
the snow must go on
Wuth their big mouth about "goin digital", they work against their own film and paper etc sales. I guess that's a strategy.
jaapv
RFF Sponsoring Member.
dmr said:
On military and movies I know nought. Medically speaking: Virtually all X-ray machines sold now are digital, so are MRI and all other new developments. Tough competition. For instance Philips Medical Systems runs rings around Kodak, especially profit-wise.
J
jern
Guest
Pherdinand said:
That's acceptance of reality.
I'm certain Kodak would love to continue making and selling analog photo products. The problem is that costs to make analog products are rising while sales are falling. Kodak has to raise prices to keep up with costs which contributes to falling sales, and sales/profits from their analog products are heading downward with increasing speed.
Despite comments in another thread that Kodak is a poorly run company, I think Kodak's management acknowledged the ascendancy of digital early enough to transition the company to digital product lines and keep it solvent. If I remember correctly Kodak also has around a billion dollars in available credit if they need help while they finish restructuring.
I think Kodak’s managment has a good, and realistic, strategy.
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