ROCHESTER, N.Y., Oct. 19 -- The big picture doesn't look good for Eastman Kodak Co., which reported a $1.029 billion loss -- $3.58 per share -- for the third quarter in a statement today. Kodak CEO Antonio Perez says he now plans to cut 25,000 jobs and close one-third of its facilities by mid-2007.
In July, Kodak said it was cutting as many as 15,000 jobs worldwide in response to the faster-than-expected decline in film sales.
According to the company, the loss reported today results from a $900 million tax charge relating to Kodak's transition from traditional film to digital products. Kodak said it has also paid down debt and spent more than anticipated in the quarter on the restructuring. A year ago, the company posted a profit of $458 million, or $1.60 per share. It is the fourth consecutive quarterly loss for the company, which posted a net loss of 51 cents per share for the second quarter, 50 cents per share for the first quarter and four cents a share for the fourth quarter of 2004. Over the past three months, Kodak stock has fallen 18 percent.
Kodak also reported a $103 million loss from continuing operations for the third quarter, before taxes, interest and other charges. One year ago, the company's operations generated earnings of $3 million. Kodak says digital and film imaging sales totaled $2 billion, down 16 percent, while earnings were $108 million, compared with $230 million a year ago.
The company's third quarter report was not all bad news, according to Kodak officials. For the first time in a quarter, Perez reported, the company's digital revenue exceeded that of its traditional products, increasing 47 percent to $1.9 billion, compared to traditional print photography and film developing revenue of $1.6 billion, a 20 percent decline. The company says there was a 48 percent increase in the sales of Kodak Picture Maker kiosks and related media, a 45 percent increase in sales of home printing products and media and a 20 percent increase in digital camera sales.
Perez said the company expects that more than 40 percent of its digital revenue will be generated in the last four months of the year. "We've made it clear that we measure success against the three critical metrics that best reflect the company we are building -- digital revenue growth, digital earnings growth and cash flow," Perez said. "In each category, our performance in the third quarter was in line with the expectations presented on Sept. 28, and we intend to carry this momentum into the fourth quarter and 2006."
Kodak announced on Tuesday that it has secured $2.7 billion in credit, including a five-year, $1 billion revolving credit line for general corporate purposes and a $1.7 billion, seven-year loan, of which $1.2 billion is being used to repay debt incurred during its acquisition of Creo in June. The remaining $500 million is available for the company to use through June 15, 2006.
For more information, visit: www.kodak.com