To all,
Kodak Loses $744 Million in Fourth Quarter
ROCHESTER, N.Y. (Reuters) - Eastman Kodak Co. Thursday reported a loss of $744 million in the fourth quarter, citing the adverse effect of the strong dollar, a
previously announced restructuring charge for job cuts and a 13 percent decline in worldwide sales.
The loss, equal to $2.29 a share, compared with year-ago profits of $164 million, or 49 cents a share, in the 1996 period.
For all of 1997, Kodak said its net income was $5 million, or one cent a share after accounting for the fourth-quarter charge of $1.5 billion. In 1996, the company
had net earnings of $1.288 billion, or $3.82 per share.
Kodak's stock fell 3/4 to 58 3/4 on the New York Stock Exchange.
Matching price cuts in the consumer film market with competitor Fuji Photo Film Co. Ltd. pushed Kodak's revenues down. Fourth-quarter sales fell 13 percent to
$3.8 billion, compared with $4.3 billion in the year-ago quarter.
For the year, sales fell almost 9 percent to $13.5 billion from $16 billion in 1996. However, excluding currency adjustments and the sale of its Office Imaging unit
last year, fourth-quarter sales were flat and full-year sales were up 3 percent.
Kodak estimated that the gains in the value of the U.S. dollar reduced its full-year revenues by $558 million. To combat the collapse in Asian currencies, it said it
will raise prices on consumer film prices in local markets.
In developed markets outside the United States, Kodak said strong volume growth was more than offset by the combined effects of currency and pricing pressures.
Although the company experienced good volume growth in emerging markets, sales were essentially flat, due to the same factors.
Kodak said it expected these pressures to continue to affect its results through 1998. However, it reiterated that cost-cutting measures underway, including the
reduction of 16,600 jobs, would reduce the company's total cost structure by more than $1 billion annually.
During the fourth quarter of 1997 and the first quarter of 1998, 4,600 jobs were cut or scheduled to be eliminated.
"1997 clearly was a disappointing year for Kodak's shareholders, its employees, and management," Kodak Chairman and CEO George Fisher said in a statement
accompanying the results.
Fisher added that management is optimistic about Kodak's future prospects, but cautioned that success will not come easily or quickly. "Although our cost reduction
efforts will position Kodak for an improved 1998, the growing strength of the U.S. dollar, continuing competitive pressures, and the phased implementation of the
cost reduction program will make it likely that results during the first quarter of 1998 will be below those of 1997."
Wolfgang |
