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Kodak Says It Will Lay Off 10,000 More Employees
Source : http://www.msnbc.msn.com/id/8639976/ 2005-07-21
ROCHESTER, N.Y. - The digital revolution dropped another bombshell Wednesday on Eastman Kodak Co.’s already beleaguered work force.
Even as Kodak speeds down the digital-photography highway, the picture-taking pioneer is struggling to cope with a sharper-than-anticipated drop in demand for conventional silver-halide film — its cash cow for the last century. Its solution: Axe 10,000 more employees.
The newest job cuts, on top of 12,000 to 15,000 targeted 18 months ago, coincided with the disclosure of a quarterly loss — its third in a row — and its stock dipped more than 5 percent.
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Kodak missed Wall Street forecasts by a wide margin, largely because of a steeper-than-expected slide in film revenues — even in emerging markets such as China. It lost $146 million, or 51 cents a share, in the April-June quarter, compared with a profit of $136 million, or 46 cents, a year ago.
Sales grew 6 percent to $3.69 billion from $3.46 billion in last year’s second quarter.
Excluding restructuring and research charges, plus a $19 million charge for reducing the value of an investment in China’s Lucky Film Co., Kodak posted earnings from continuing operations of 53 cents a share. Analysts surveyed by Thomson Financial had forecast earnings of 80 cents a share.
“I don’t need to change our overall strategy — the further we get into this, the better the strategy looks,” Kodak’s new chief executive, Antonio Perez, said during a conference call with analysts. “But I need to dramatically accelerate some of the steps needed to get there.
“Sales of our consumer traditional products are declining faster than expected,” he said. “Although we have been moving rapidly to get our costs down ... we are picking up the pace dramatically. This is what the company needs to succeed as a digital company.”
To fortify its swelling digital businesses, Kodak is slashing deeper than it set out to do in January 2004. The new cuts will include 7,000 manufacturing jobs, many in Kodak’s hometown.
“It’s a company now oriented toward having others make everything else for them, and concentrating on research and marketing,” said Ulysses Yannas, a broker for Buckman, Buckman & Reid.