JoeFriday
Agent Provacateur
http://news.yahoo.com/s/ap/20060504/ap_on_bi_ge/earns_kodak_3
Eastman Kodak Co., undergoing a bumpy transition to digital photography, posted a wider $298 million loss in the first quarter Thursday — its sixth quarterly loss in a row — and is considering possibly selling its fabled health-imaging business.
Largely because of restructuring costs, Kodak lost the equivalent of $1.04 in the January-March quarter, compared with a loss of $146 million, or 51 cents a share, a year ago.
Sales rose 2 percent to $2.89 billion from $2.83 billion in last year's first quarter.
Excluding one-time items, Kodak lost $99 million, or 34 cents a share. That compared with a consensus forecast of a 5-cent profit among analysts surveyed by Thomson Financial.
Kodak shares fell 14 cents to $27.21 in premarket trading.
While stung again by the rapid slide in film sales, Kodak found some solace in its steady drive into the digital era. Its overall digital sales in the quarter surged 29 percent to $1.6 billion, while revenues from film, paper and other traditional, chemical-based businesses slumped 20 percent to $1.26 billion.
Last summer, the 126-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.
Kodak said it is "exploring strategic alternatives" for its Health Group, maker of X-ray film, medical printers and other health-imaging products and services. Those alternatives include a partnership, an outright sale and other options, said spokesman David Lanzillo. The division, which had revenues of $2.7 billion in 2005, was created a year after the discovery of X-ray film in 1895.
While the business "is enjoying strong organic growth in elements of its digital portfolio ... we have been observing for some time consolidation in this industry," Kodak's chief executive, Antonio Perez, said in a statement. "Given our valuable assets and the changing market landscape, we feel that now is the time to investigate strategic alternatives."
Kodak sped past a historic milestone last year by generating more annual sales from digital imaging than from film-based photography, but its ability to churn out digital profits is proving trickier. The company said in January it expects to post an overall operating loss of $500 million to $850 million in 2006.
Kodak said Thursday it expects digital profits to grow to $350 million to $450 million this year and digital sales to rise by 16 percent to 22 percent.
The company acknowledged in September 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 around the world 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.
Higher industry-wide retailer inventories and lower prices for thermal media hurt Kodak's consumer digital sales, and its operating loss in the segment widened to $94 million from $58 million a year ago while sales dropped 10 percent to $498 million.
Film and photofinishing sales slumped to $916 million from $1.27 billion a year ago while operating profits dropped to $29 million from $71 million.
Health imaging sales fell 7 percent to $585 million, and operating earnings dipped to $46 million from $78 million, mostly because of lower earnings from traditional radiography film and higher silver costs. That was partially offset by improved earnings in computed radiography, healthcare information systems and digital radiography, but digital earnings fell to $17 million from $33 million a year ago.
In contrast, graphic communications sales jumped 136 percent to $870 million, driven by its $980 million buyout of Canada's Creo Inc., and operating earnings reached $31 million, compared with a loss of $34 million a year ago.
Eastman Kodak Co., undergoing a bumpy transition to digital photography, posted a wider $298 million loss in the first quarter Thursday — its sixth quarterly loss in a row — and is considering possibly selling its fabled health-imaging business.
Largely because of restructuring costs, Kodak lost the equivalent of $1.04 in the January-March quarter, compared with a loss of $146 million, or 51 cents a share, a year ago.
Sales rose 2 percent to $2.89 billion from $2.83 billion in last year's first quarter.
Excluding one-time items, Kodak lost $99 million, or 34 cents a share. That compared with a consensus forecast of a 5-cent profit among analysts surveyed by Thomson Financial.
Kodak shares fell 14 cents to $27.21 in premarket trading.
While stung again by the rapid slide in film sales, Kodak found some solace in its steady drive into the digital era. Its overall digital sales in the quarter surged 29 percent to $1.6 billion, while revenues from film, paper and other traditional, chemical-based businesses slumped 20 percent to $1.26 billion.
Last summer, the 126-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.
Kodak said it is "exploring strategic alternatives" for its Health Group, maker of X-ray film, medical printers and other health-imaging products and services. Those alternatives include a partnership, an outright sale and other options, said spokesman David Lanzillo. The division, which had revenues of $2.7 billion in 2005, was created a year after the discovery of X-ray film in 1895.
While the business "is enjoying strong organic growth in elements of its digital portfolio ... we have been observing for some time consolidation in this industry," Kodak's chief executive, Antonio Perez, said in a statement. "Given our valuable assets and the changing market landscape, we feel that now is the time to investigate strategic alternatives."
Kodak sped past a historic milestone last year by generating more annual sales from digital imaging than from film-based photography, but its ability to churn out digital profits is proving trickier. The company said in January it expects to post an overall operating loss of $500 million to $850 million in 2006.
Kodak said Thursday it expects digital profits to grow to $350 million to $450 million this year and digital sales to rise by 16 percent to 22 percent.
The company acknowledged in September 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 around the world 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.
Higher industry-wide retailer inventories and lower prices for thermal media hurt Kodak's consumer digital sales, and its operating loss in the segment widened to $94 million from $58 million a year ago while sales dropped 10 percent to $498 million.
Film and photofinishing sales slumped to $916 million from $1.27 billion a year ago while operating profits dropped to $29 million from $71 million.
Health imaging sales fell 7 percent to $585 million, and operating earnings dipped to $46 million from $78 million, mostly because of lower earnings from traditional radiography film and higher silver costs. That was partially offset by improved earnings in computed radiography, healthcare information systems and digital radiography, but digital earnings fell to $17 million from $33 million a year ago.
In contrast, graphic communications sales jumped 136 percent to $870 million, driven by its $980 million buyout of Canada's Creo Inc., and operating earnings reached $31 million, compared with a loss of $34 million a year ago.
