Kodak Reports 1.03 Billion Dollar Loss for 3Q

[bmattock]

http://www.marketwatch.com/news/story.asp?guid={223488D0-4841-4CCB-89D6-65BA4CD825ED}&siteid=google

NEW YORK (MarketWatch) -- Eastman Kodak Co., still feeling the pain from a drop in film sales as it makes a tough transition into a digital-photography business, Wednesday reported a $1.03 billion quarterly loss due to restructuring charges.

Many will see this as punishment for Kodak for turning their evil corporate back on traditional film. However...

Kodak said its quarterly revenue was $3.55 billion, up 5% from last year's $3.37 billion. A 47% increase in digital revenue helped offset a 20% decline in traditional revenue.

And,

http://www.tahlequahdailypress.com/articles/2005/10/17/ap/business/d8db34v80.txt

Wednesday, October 19, 2005 6:51 AM CDT

ROCHESTER, N.Y. - Eastman Kodak Co., stung by a sharp drop in film sales midway through its painful shift from traditional photography to digital imaging, posted a $1.03 billion third-quarter loss largely because of one-time tax charges related to its massive restructuring.

I realize that no one is happy to see film going away. And I understand that everybody wants to 'blame Kodak' for choosing to move quickly away from film and towards digital. But facts are facts, folks. The general public is not buying film. If Kodak were ignoring the digital market and sticking with film, they'd be bankrupt right now - and everybody at Kodak would be out of work.

So, despite your urgent need to punish the Kodak for being mean and evil, consider that their only chance to preserve SOME jobs and continue to exist is to get away from film as fast as they can. I'm sorry that it is true, but it is true.

Onward and upward. New frontiers, friends.

Best Regards,

Bill Mattocks

 

[zeos 386sx]

Kodak is smart and has good survival instincts. They also have diversity. I think they will be all right.

 

[bmattock]

Kodak is smart and has good survival instincts. They also have diversity. I think they will be all right.

I agree. I just find it interesting how many people feel bitterness towards Kodak and want to 'punish them' for not supporting film. Then they complain that Kodak is laying off employees. Duh.

How dare a company see technology changing and decide to change with the times instead of downsizing to the size of a laundromat and keeping a few hundred people employed to make traditional film for an ever-shrinking base of customers! Why, they should have fought the good fight! They should have gone down with the ship!

I understand anger over changing times, especially when the affect our vocations and avocations so directly. I don't understand the denial, blame, and general running around like Chicken Little that accompanies it. But it is interesting to watch. History being made!

Best Regards,

Bill Mattocks

 

[dmr]

The general public is not buying film. If Kodak were ignoring the digital market and sticking with film, they'd be bankrupt right now ...

So why isn't Fuji bankrupt? Pulling their chart up, it looks like they are holding their own.

 

[breakaway]

Fuji IMO has a pretty strong digital market from the S3/S2 pros to the F10/F11 and a whole range of digital cameras.

 

[Solinar]

So why isn't Fuji bankrupt? Pulling their chart up, it looks like they are holding their own.

A good question - I would have to say that their film sales are way down as well.

 

[dmr]

Fuji IMO has a pretty strong digital market from the S3/S2 pros to the F10/F11 and a whole range of digital cameras.

Funny, cuz I know quite a few people with Kodak digital cameras of various kinds but I can't think of anybody right off hand who has a Fuji digita,

 

[P C Headland]

Kodak said its quarterly revenue was $3.55 billion, up 5% from last year's $3.37 billion. A 47% increase in digital revenue helped offset a 20% decline in traditional revenue.

Don't forget Revenue != Profit. While revenues in the film side have undoubtedly gone down, I very much doubt their profit margin has shrunk. If anything, with the drop in R&D in film, the margins have probably improved. It is likely that the margins in digital are much smaller, and require more up-front investment.

Still, good luck to them, it would be a shame to see them die. As they step out of the film market, others that are able to survive in a lower volume market will step in.

Paul

 

[ywenz]

So, despite your urgent need to punish the Kodak for being mean and evil, consider that their only chance to preserve SOME jobs and continue to exist is to get away from film as fast as they can. I'm sorry that it is true, but it is true.

What!? who told you that we all wanted to see Kodak suffer? highly presuming on your part eh?

So why isn't Fuji bankrupt? Pulling their chart up, it looks like they are holding their own.

Fuji film is part of an umbrella company that has tremendous diversity.. they can probably take a hit in their film division.

 

[bmattock]

What!? who told you that we all wanted to see Kodak suffer? highly presuming on your part eh?

Eh, no, actually. Read some of the posts here - people urging others to buy Ilford film because 'they've stuck with us' and not buy Kodak because they're right bastards and abandoned us. Not 'everyone', nor did I say that. But certainly some.

Fuji film is part of an umbrella company that has tremendous diversity.. they can probably take a hit in their film division.

Absolutely true.

It can also be fairly said that things are still in a state of flux - not regarding the ultimate fate of film, but regarding what the new division of markets will be. Fuji may be in a financial position to stay the course and hold down a profitable, albeit shrinking, market for color print and reversal film - when the other makers finally exit, there may be room for a single company to make some money. Imagine Ilford holding down the B&W side and Fuji making color film products. Just a possibility, everything is very fluid right now.

Best Regards,

Bill Mattocks

 

[bmattock]

So why isn't Fuji bankrupt? Pulling their chart up, it looks like they are holding their own.

A mystery, eh? Well, facts are facts. Kodak has lagging film sales. Why would that be? Maybe because people are not buying it? Just a thought.

But perhaps there is a criminal conspiracy - film is actually going like hotcakes, people are clamoring for it, and Kodak is fiendishly pulling it off the market in order to sell their unwanted digital cameras.

I've watched the film aisles shrink at Walmart, Walgreens, and other retail film outlets. From Kodak+Fuji+House Brand and all speeds and even some B&W, down to ONE MAJOR (Kodak or Fuji), a few emulsions, dropping off the 100 ISO, and no more B&W (excepting C41 Mono). A few weeks ago, I noticed all the slide film was gone, pulled from the shelves. I checked every convenience and retail film sale store here in town - not one roll of slide film to be had.

I fail to notice the line of outraged customers lining the streets. I asked about the missing slide film - and I had to explain what slide film actually IS to the clerk. They had no idea, never having seen any.

We can continue to pretend that film is not dying if you wish. Denial is a hard thing to get past.

Best Regards,

Bill Mattocks

 

[dmr]

I've watched the film aisles shrink at Walmart, Walgreens, and other retail film outlets. From Kodak+Fuji+House Brand and all speeds and even some B&W, down to ONE MAJOR (Kodak or Fuji), a few emulsions, dropping off the 100 ISO, and no more B&W (excepting C41 Mono). A few weeks ago, I noticed all the slide film was gone, pulled from the shelves.

One thing I've noticed is that very consistently the quantity of roll film is dropping with respect to the preloaded disposable cameras.

Tar-Jhay had a good selection of both yellow and green boxes last week. Walgreens had a good selection of Kodak and house brand a couple days ago.

 

[Peter Klein]

I don't wish to see Kodak suffer. I do wonder why, whenever I like a film of theirs, they do one of three things:

1. Discontinue it.
2. Rename it.
3. Mark it for export only.

It's almost like they have a channel into my brain, and they know that whatever I like, it's the opposite of the mythical average American. 🙂

A Kodak person is scheduled to speak at the LHSA (Leica Historical Society of America) gathering in San Francisco at the end of the month. Advance word is that Kodak is still committed to film. They are adjusting to market realities in terms of how much of their business it is, but it still is a major part of their business.

--Peter

 

[bmattock]

One thing I've noticed is that very consistently the quantity of roll film is dropping with respect to the preloaded disposable cameras.

Tar-Jhay had a good selection of both yellow and green boxes last week. Walgreens had a good selection of Kodak and house brand a couple days ago.

My nearest Target store is an hour's drive away, but the last time I was there, Kodak UC 400 was on sale (I bought a bunch of it) and their film was literally covered in dust - some was expired. Nobody buying that lot, anyway.

Local Walgreens, CVS, and Walmart are all shrinking their film aisles. Like you, I can report some of the spaces where film used to be have been taken up by single-use disposable cameras - lots of 'em.

Walgreens just signed an agreement with Kodak to sell their products exclusively, except for their own label (Studio 35 aka Agfa Vista). No more Fuji there. None.

I can't find Kodak Gold 100 anywhere, just 200, 400, and 800. Same for Fuji at Walmart - just 200/400/800. No slide film, no B&W (a few months ago, even my local Walmart had a lone roll of Tri-X, but that's gone now and so is the space it took up).

I understand the reticence to see what is coming - none of us are happy about it, least of all me. But I like to face reality, when I can bear it.

Best Regards,

Bill Mattocks

 

[Honu-Hugger]

I don't wish to see Kodak suffer. I do wonder why, whenever I like a film of theirs, they do one of three things:

1. Discontinue it.
2. Rename it.
3. Mark it for export only.

It's almost like they have a channel into my brain, and they know that whatever I like, it's the opposite of the mythical average American. 🙂

A Kodak person is scheduled to speak at the LHSA (Leica Historical Society of America) gathering in San Francisco at the end of the month. Advance word is that Kodak is still committed to film. They are adjusting to market realities in terms of how much of their business it is, but it still is a major part of their business.

--Peter

😀 This has been so frustrating! My entire life I used Kodak film exclusively until the last couple of years when quite reluctantly I was forced to consider other makes. Please brief us on what you learn at the conference, it will be interesting.

 

[bmattock]

I don't wish to see Kodak suffer. I do wonder why, whenever I like a film of theirs, they do one of three things:

1. Discontinue it.
2. Rename it.
3. Mark it for export only.

Like many a large corporation, Kodak suffered for years from being too large, ponderous, and run by dinosaurs. Some of their current problems are the distinct result of their own blunders in years and even decades past.

It's almost like they have a channel into my brain, and they know that whatever I like, it's the opposite of the mythical average American. 🙂

Certainly not what a company would do that wants to stay in business, I agree.

A Kodak person is scheduled to speak at the LHSA (Leica Historical Society of America) gathering in San Francisco at the end of the month. Advance word is that Kodak is still committed to film. They are adjusting to market realities in terms of how much of their business it is, but it still is a major part of their business.

Couple of things. First, that's spin-doctor-speak. Of course Kodak will continue to trumpet their comittment to film, up until the day the last yellow box ships. And then they will go mysteriously silent and refuse to answer questions like "You said you supported film!" Come on, that's the corporate way. You can't seriously believe anything this sock puppet says. He is there to please you, not make you angry.

Second, let's consider facts. Kodak has made a recent large expenditure modernizing and consolidating their B&W film production facilities. They are still amortizing that expense. So unless they have a buyer of that facility up their sleeve (or are considering a spin-off-and-die routine like Agfa Gevaert -> Agfa Photo), they WILL actually be producing B&W emulsions for some time to come.

The older plants cost less to operate than to shut down, so yes, there is some committment to film there, too. See, if they shut down one of their older plants, the EPA comes in and tells them what they have to do to clean it up, and it will cost billions. Yes, billions. They've already investigated this and run the numbers. So they hope to run the plants until they can't extract money from film sales anymore, and then aim for a good shutdown date when the EPA can be counted on to look the other way.

Hmmm. Let's see. We know that President Bush is a friend of industry. No secret there, and no political axes to grind on my part. He's a lame duck president. Let's take his last day in office. 2008. Let's say he calls over to the EPA and asks them for a parting favor - or issues an Executive Order (but probably won't have to go that far). He asks for the EPA to let Kodak quietly shut down their plants - no costly cleanup. Who is going to complain? The environmentalists have all be stifled in recent years. The locals will be more concerned about losing their jobs than about the heavy metal toxins in the groundwater. It all just goes away.

This is all theoretical, mind you. Just my fevered imaginings.

But do go and hear what the nice Kodak man says. I'd bring a huge box of salt to take it with, but that's just me.

Best Regards,

Bill Mattocks

 

[phototone]

Funny, cuz I know quite a few people with Kodak digital cameras of various kinds but I can't think of anybody right off hand who has a Fuji digita,

All the wedding and portrait photographers around here use the Fuji S2. Most say that it produces the best in-camera jpg files of all the digital SLR's. Wedding and portrait photographers do not like to spend hours at the computer adjusting their files, nor do they need the higher resolution of the newer 8, 12 and 16mp SLR's, since photos of people do not require as high a resolving power.

Since I am a commercial/industrial photographer, I use the Kodak SLR's, 14 mp. and I shoot raw and I spend time at my computer optimizing the files, however i do not shoot hundreds of shots on each job.

Fuji does have a rather unique "niche" market with professional portrait and wedding photographers with the S2, and the S3.

 

[bmattock]

😀 This has been so frustrating! My entire life I used Kodak film exclusively until the last couple of years when quite reluctantly I was forced to consider other makes. Please brief us on what you learn at the conference, it will be interesting.

I always thought it was kind of funny - many people 'in the know' used to run Kodak down at every turn (sometimes with very legitimate criticism, true) and "Yellow Box" was a bit of a perjorative. Now they are mad that the company they loved to hate is getting out of the film business. I have to go "HUH?"

Best Regards,

Bill Mattocks

 

[phototone]

The use of disposable cameras (with FILM) is not declining worldwide. In fact, I believe it is actually growing. As long as the disposable camera market is viable, then there HAS to be film made. It is the same size film (35mm) as put into cassettes for 35mm RFDR and SLR cameras, and therefore it is no cost to produce it in spools for that use. Of course it is only lowly C-41 color negative stock.

Also, the cinema market worldwide is still huge. Perhaps even more so, now that film distributors are releasing films quickly, an average film may have 2000 prints made for release, and each film is between 8000 ft. and 10,000 ft. long. Thats a ton of film production. Digital theatres are still more a dream than a reality. I think there are less than 150 screens worldwide set-up for digital presentation.

So when you talk about the viability of film coating plants, you really need to consider all the uses for traditional "film" products, not just the small market of still camera RFDR and SLR's.

BTW, did you know that most "disposable" cameras are now "resuable" cameras, and are recycled back to be refilled. Wonder why this wasn't done from the start.

 

[Skinny McGee]

Ah!!!! Digital what can't it do? It can bring companies to it knee's.... You can make pictures that you never took... Like an autumn leaf on a river it will blow them all away.... ... Then we will all have some really expensive paper weights......... I really hate this.....