Kodak Goes For Digital Success, Cuts More Jobs
Eastman Kodak is accelerating its previously announced business model, which it is building in hopes of achieving long-term success in digital markets.
“Kodak is a company with product portfolios that are proceeding on two very different tracks,” said President and CEO Antonio M. Perez. “As sales of our traditional consumer products and services decline faster than anticipated, we are moving more aggressively to reduce cost. At the same time, we continue to make significant progress growing the sales and earnings of our digital portfolio. Second-quarter digital sales, for example, increased 43%, and we made significant progress in improving our digital earnings.”
The company hopes for its digital revenue to grow by about 36% this year, and for its digital earnings from operations to reach somewhere between $275 million and $325 million. According to a press release issued by the company,
Second-quarter revenue totaled $3.686 billion, up 6% from the year-ago quarter. The net loss, on the basis of generally accepted accounting principles in the U.S. (GAAP), was 51 cents per share, primarily reflecting charges associated with the previously announced restructuring of Kodak’s traditional infrastructure, in-process research and development charges related to acquisitions, and an asset impairment charge relating to an investment in Lucky Film company. Earnings from continuing operations, excluding non-operational items, were 53 cents per share.
Eastman Kodak said in January that it would reduce its worldwide employment by as many as 15,000 jobs. Now that number has been increased to between 22,500 to 25,000 jobs. The company says this is necessary to compete profitably in digital markets.
“In 24 months, as a result of the actions announced today, we will bring to an effective end the significant restructuring charges associated with the transformation and essentially complete the transition to our digital business model,” Perez said.
“In that time, we intend to improve upon the success we are enjoying in digital markets,” he continued. “In June, for example, our digital revenue exceeded our traditional revenue on a monthly basis for the first time ever, paving the way for us to achieve the full-year goal of having digital revenue surpass traditional revenue. Kodak is a different company that’s becoming a stronger digital player each day.”
Kodak continues to expect net cash provided by operating activities this year of $1.0 billion to $1.2 billion, which corresponds with investable cash flow of $400 million to $600 million.