ROCHESTER, N.Y. – Eastman Kodak Co. can’t seem to take pictures without the lens cap on.
For the seventh quarter in a row, as it moves anxiously through the third year of a historic four-year digital makeover, the company that put film cameras into nearly every home in America reported a financial loss Tuesday.
Kodak’s stock took a beating – dropping 13.7 percent to a 15-year low – after it posted an April-June loss of $282 million, or 98 cents a share. That was close to double its loss of $155 million, or 54 cents a share, in last year’s second quarter.
Even while becoming a major player in digital photography and printing in the 21st century, Kodak has been wading through red ink. With digital sales now outpacing those from film, paper and other chemical-based products, it is hoping to soon spin far larger profits from those newly dominant markets.
“They have reached a critical mass in digital sales, which means they don’t have to aggressively pursue sales through price cuts and can focus on profitability,” said Ulysses Yannas, a broker with Buckman, Buckman &Reid in New York.
As part of that strategy, Kodak said Tuesday it is shifting manufacturing of digital cameras to Flextronics International Ltd. and transferring 550 employees to the Singapore-based company. Those will be among 2,000 jobs that Kodak wants to eliminate by 2007 – on top of 22,000 to 25,000 jobs already targeted since January 2004.
Kodak did not disclose where the other layoffs would be made, but analysts think most will be tied to its tightening of global sales operations and its $1.8 billion buyouts last year of Canada’s Creo Inc. and Sun Chemical Corp.’s 50 percent stake in Kodak Polychrome Graphics.
Stung by a continuing rapid slide in sales of silver-halide film, Kodak’s cash cow for much of the 20th century, revenues in the quarter fell 9 percent to $3.36 billion from $3.69 billion a year ago.
Excluding one-time items, including $214 million in restructuring costs, Kodak lost $54 million, or 19 cents a share.
Its shares fell $3.05 to close at $19.20 on the New York Stock Exchange, their lowest close since finishing at $19.17 on July 24, 1991. More than 50 percent of the shares are owned by long-term institutional investors.
The sell-off, analysts said, was largely triggered by Kodak’s projection that weaker digital revenues will now result in a 3 percent drop in overall sales this year, down from earlier forecast ranging from a 2 percent fall to a 4 percent gain.
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