Kodak's Daniel Carp (Transcript of Interview)
--From AOL. Still in denial, IMO.-- Cooters
Rochester, New York, Jan. 17 (Bloomberg) -- The following is a transcript of a Bloomberg interview with Daniel Carp, president and chief executive officer of Eastman Kodak. The reporter is Dylan Ratigan.
RATIGAN: THE FILM BUSINESS WAS A TOUGH ONE IN 2000 AFTER NICE GROWTH IN NAMES LIKE EASTMAN-KODAK IN TERMS OF FILM CONSUMPTION IN 1999. THE SECOND HALF OF 2000 SAW THE BEGINNING OF A CONTRACTION IN TERMS OF FILM DEMAND. AND FEELING THAT CONTRACTION WAS EASTMAN KODAK. IF YOU LOOK AT THE BOARD BEHIND ME YOU CAN SEE A WARNING THERE IN THE LATE PORTIONS OF THE YEAR 2000. THEY REPORTED THEIR MOST RECENT QUARTER JUST ABOUT AN HOUR AGO. THE COMPANY MET REDUCED STREET EXPECTATIONS OF 68 CENTS A SHARE. AND THE GENTL EMAN RESPONSIBLE FOR RUNNING THE COMPANY JOINS US FROM ROCHESTER WHERE THEY ARE BASED. DANIEL CARP RUNS EASTMAN KODAK. AND GOOD MORNINGTO YOU, MR. CARP, HOW ARE YOU?
CARP: GOOD. THANK YOU FOR HAVING ME.
RATIGAN: IT'S A PLEASURE TO HAVE YOU HERE. TELL ME ABOUT WHAT WE SHOULD REASONABLY EXPECT FROM 2001. SO MUCH OF THE SLOWDOWN THAT YOU SUSTAINED IN THE BACK HALF OF 2000 ATTRIBUTED TO THE OVERALL ECONOMIC ENVIRONMENT. I WANT TO KNOW THE DEGREE OF SENSITIVITY TO THAT. WE SHOULD BE EXPECTING FROM YOU THIS YEAR WHAT?
CARP: WE WERE ONE OF THE FIRST PEOPLE TO SEE IT IN SEPTEMBER. AND THE SLOWDOWN CONTINUED THROUGH THE END OF THE YEAR. WE SEE WEAKNESS THROUGH THE FIRST HALF AND WE HAVE EXPECTATIONS THAT THINGS WILL STABILIZE AND START TO GO BACK TO THE MORE NORMAL TREND IN THE SECOND HALF OF THE YEAR. >
RATIGAN: IS THE NORMAL TREND IN YOUR MIND WHAT WE SAW IN 1999 WHEN YOU SAW FILM DEMAND GROWING IN SOME QUARTER ON A DOUBLE DIGIT BASIS?
CARP: I THINK 1999 WAS JUST A SUPER YEAR. IT WAS IN THE 14% RANGE. I THINK THE MORE NORMAL RAT SHOULD BE IN THE 5% TO 10% RANGE, WHICH WE SAW DURING THE FIRST HALF OF 2000. AND IT WASN'T UNTIL SEPTEMBER WHEN SO MANY COMPANIES STARTED TO SEE A SLOWDOWN DID WE SEE THIS THING TAPER OFF. UNFORTUNATELY, I HAVE TO TELL YOU THAT THROUGH CHRISTMAS IT DIDN'T GET ANY BETTER. THAT TELLS ME THAT THE CONSUMER REALLY HASN'T FOUND THEIR FOOTING YET. AND IT WILL BE THE FIRST HALF A TOUGH GO FOR MOST OF US.
RATIGAN: IF YOU LOOK AT THE PROBLEMS THAT YOU HAVE HAD TO DEAL WITH AT KODAK, TO WHAT EXTENT DO YOU ATTRIBUTE THE SLOWDOWN TO THE ECONOMY AND TO WHAT EXTENT IS IT AN ISSUE OF A TRANSITION FROM MORE AND MORE OF A DIGITAL-BASED PICTURE BUSINESS AND LESS AND LESS OF A FILM-BASED BUSINESS? THE NICE THINGABOUT FILM IS ONCE YOU'VE TAKEN PICTURES, YOUYOU HAVE TO BUY MORE FILM. THE PROBLEM WITH A DIGITAL ENVIRONMENT IS IF I HAVE DIGITAL IMAGING THERE IS LESS OF A DISPOSABLE CONSUMPTION. I WANT TO GET A SENSE OF HOW MUCH THAT IS CONTRIBUTING TO THE SLOWDOWN IN DEMAND AT YOUR COMPANY.
CARP: YEAH. WELL, IF YOU THINK OF KODAK IN TWO PIECES, A COMMERCIAL PIECE AND A CONSUMER PIECE, THE COMMERCIAL PIECE IS GOING THROUGH THAT TRANSITION. AND BOTH OUR HEALTH BUSINESS AND IN OUR PROFESSIONAL BUSINESS. AND IT'S GOING OK. BOTH ARE GROWING FAIRLY WELL. NOW, IN BOTH TRADITIONAL AND DIGITAL BUSINESSES. IN THE CONSUMER BUSINESS, WHAT GETS ALL THE ATTENTION YOU'RE RIGHT. THE QUESTION IS, IS THERE DIGITAL SUBSTITUTION GOING ON? THROUGH 2000 THAT'S JUST NOT THE CASE. THERE IS 175 MILLION TRADITIONAL CAMERAS IN USE. AND THERE IS ONLY FOUR MILLION DIGITAL CAMERAS. SO IT'S NOT ENOUGH TO IMPACT IT. SOMEDAY, DYLAN, WE'LL BE TALKING ABOUT THAT BUT THAT CERTAINLY NOT ON THE AGENDA TODAY.
RATIGAN: IT DOESN'T SOUND LIKE BASED ON YOUR TONE OF VOICE THAT WILL BE ON THE AGENDA FOR 2001?
CARP: NO. IT'S OUT IN THE FUTURE. WHILE THAT HAPPENS, DIGITAL GIVES CONSUMERS A WHOLE BUNCH OF NEW THINGS TO DO. FOR EXAMPLE, TO SCAN THEIR IMAGES AT THE RETAILER, AND WE CAN GIVE THEM THEIR PICTURES BACK IN ALBUMS ALREADY PUT TOGETHER FOR THEM. WE CAN KEEP THE PICTURES OF YOUR CHILD AND GIVE YOU LISA'S YEAR IN PICTURES AT THE END OF THE YEAR. THERE ARE OTHER GROWTH OPPORTUNITIES THAT COME ABOUT FOR DIGITAL. WE SEE THE PIE GETTING BIGGER. AND IT TRANSITIONS OVER TIME. AND THAT'S A U.S. STORY. IF YOU GO TO EMERGING MARKETS THAT WILL BE A TRADITIONAL FILM BUSINESS FOR MANY, MANY YEARS.
RATIGAN: IF YOU LOOK AT YOUR EXPECTATIONS FOR RELATIVE WEAKNESS IN THE FIRST HALF OF THE YEAR ALONG WITH THE REST OF THE FORTUNE 500, NOT THE REST BUT A LOT OF THE FORTUNE 500, ARE YOU COMFORTABLE WITH THE CURRENT ESTIMATES ON THE COMPANY FROM THE STREET GOING INTO THIS THING OR DO YOU FEEL THERE IS ANOTHER NEED TO ADJUST?
CARP: HOPEFULLY WE HAVE OUR RANGE SET PRETTY RIGHT. AND WE THINK THE CURRENT ESTIMATES ARE RIGHT, TOO. WE'LL HAVE TO SEE. I'VE NEVER BEEN IN A PERIOD WHERE THE ECONOMY IS CHANGING QUITE LIKE THIS. I MEAN WE'VE GOT A SITUATION WHERE THE ECONOMY CHANGED VERY QUICKLY IN SEPTEMBER, CARRIED THROUGH THE END OF THE YEAR. I'M HOPEFUL THAT THE ACTION BY OUR GOVERNMENT LEADERS AND THE FED WILL CAUSE CONSUMER CONFIDENCE TO RISE AND WE'LL GET INTO A MORE STABLE BUSINESS ENVIRONMENT. THAT'S IMPORTANT NOT JUST FOR THE U.S. THIS WAVE WILL WASH ACROSS THE WORLD. SO I'M FAIRLY OPTIMISTIC THAT PEOPLE ARE TAKING ACTION ON THE RIGHT THINGS. THE TRICK WILL BE HOW WILL THE TIMING WORK OUT?
RATIGAN: UNDERSTOOD. I'VE GOT TO JUMP.
END OF TRANSCRIPT***
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Jan/17/2001 9:52 ET |
