Kodak Financial Woes Deepen: Film Future?

[Marco Polo]

I read recently that Kodak is losing money on their inkjet printing, packaging and software units, but the film line is still profitable (although the revenue is falling). So I imagine they will keep film around for a while, since they can't seem to make money on anything else (except maybe lawsuits).

[Brian C. Miller]

Marco, in one of these threads there's a link to a newspaper article which pretty much states the opposite. If Kodak were in the printing, packaging and software business, they would be the darlings of Wall Street. Kodak's shares have risen based on their lawsuit against RIM and Apple (link), but in Colorado they are demolishing buildings once use for film production (link). "We have two thriving businesses on site, color paper finishing and thermal media manufacturing."

[Marco Polo]

Brian,

You might be right, but I read the info on the Bloomberg Business website, and they should know whether those business lines are profitable or not. The article was about the RIMM suit.

[Marco Polo]

If you're interested in Kodak, this is worth reading:

http://www.postandcourier.com/news/2...odak-on-track/

[lenser]

In 1964, when I was first getting into photography and at the same time was in a junior high civics class, one of our class projects was to learn about the stock market by choosing two company's stocks to follow for a semester as though we were investers. One of mine was Kodak and at the end of the term, it was one of the lowest performers in class with consistent losses.

I didn't keep up with it as a business entity in the intervening years except for the complete fraud of jacking up silver based product prices during the Hunt brothers efforts to corner the silver market. (The fraud part was when a few months later, silver tanked from the mid $50.00 range down to about $5.00 per ounce and yet Kodak made no drop in product prices.) And then there was the enormously expensive debacle with the instant film wars that they lost with Polaroid over copyright infringements.

It feels that over the decades, management has perhaps somewhat consistently pissed away what was once a thriving and honorable company, at least from this person's admittedly limited point of view.

[Brian Ellis]

I read recently that Kodak is losing money on their inkjet printing, packaging and software units, but the film line is still profitable (although the revenue is falling). So I imagine they will keep film around for a while, since they can't seem to make money on anything else (except maybe lawsuits).

Could you give us a link or a cite to what you read? I ask because that isn't exactly what Kodak is saying or what the financial statements show. Kodak's 2010 annual report filed with the SEC shows an operating profit before interest, taxes, etc. from the Film, Photofinishing, and Entertainment Group of $64 million (which unfortunately is a 60% decrease over 2009). But it doesn't show a loss from the Consumer Digital Imaging Group. In fact it shows an operating profit before interest, taxes, etc. of $331 million (an increase of 846% over 2009). So I'm not sure exactly what you're looking at. Of course overall the company continues to produce losses, partly attributable to a goodwill impairment charge from the Film, Photofinishing and Entertainment Group of $646 million in 2010.

[Marco Polo]

Brian,

The business unit that sells film is still making money. The other two units are not yet profitable. The copy below is from the Bloomberg article, which has been updated since I originally read it, but still contains this info:

"The company in January reported 2010 revenue of $7.2 billion, about half the total from 2005, and said two of its three main businesses had losses from continuing operations before interest expense, taxes and other charges.

Perez, CEO since 2005, has said he is using proceeds from intellectual property licensing to invest in the company’s inkjet printing, packaging and software units to blunt falling revenue from camera film."


http://www.bloomberg.com/news/2011-0...apple-rim.html

[D. Bryant]

Brian,

The business unit that sells film is still making money. The other two units are not yet profitable. The copy below is from the Bloomberg article, which has been updated since I originally read it, but still contains this info:

"The company in January reported 2010 revenue of $7.2 billion, about half the total from 2005, and said two of its three main businesses had losses from continuing operations before interest expense, taxes and other charges.

Perez, CEO since 2005, has said he is using proceeds from intellectual property licensing to invest in the company’s inkjet printing, packaging and software units to blunt falling revenue from camera film."


http://www.bloomberg.com/news/2011-0...apple-rim.html

I don't understand why Perez hasn't been fired. Everything he touches turns to shit. I'm not usually a Kodak basher but I've come to the point where I no longer have any confidence in the company. I realize that companies that are long lived continually need to transform themselves, but Kodak just can't seem to determine what it needs to be or how to get there profitably which brings into scrutiny upper management.

Sadly I think the company is lost.

Don Bryant

[Brian Ellis]

Brian,

The business unit that sells film is still making money. The other two units are not yet profitable. The copy below is from the Bloomberg article, which has been updated since I originally read it, but still contains this info:

"The company in January reported 2010 revenue of $7.2 billion, about half the total from 2005, and said two of its three main businesses had losses from continuing operations before interest expense, taxes and other charges.

Perez, CEO since 2005, has said he is using proceeds from intellectual property licensing to invest in the company’s inkjet printing, packaging and software units to blunt falling revenue from camera film."


http://www.bloomberg.com/news/2011-0...apple-rim.html

I understand that the Kodak business unit that sells film is still producing net revenues before interest, taxes, etc. (which actually doesn't necessarily mean it's "making money" or is profitable since there may be non-operating costs or expenses charged to that unit such as the $610 million goodwill write-off I mentioned in my previous message). As for the Bloomberg article as it relates to the Consumer Digital Imaging Group, I don't know what two businesses the author of the Bloomberg article is talking about since he or she didn't specify them and doesn't provide any numbers. But here are the 2010 net operating revenues before interest, taxes, etc. for Kodak's three operating divisions as shown in Kodak's 2010 annual report filed with the SEC:

"Earnings (Loss) from Continuing Operations Before Interest Expense, Other Income (Charges), Net and Income Taxes by Reportable Segment


For the Year Ended December 31, 2010 (in millions)


Consumer Digital Imaging Group Change
$ 331 +846%
Graphic Communications Group
(26 ) +38
Film, Photofinishing and Entertainment Group
64 -60"

If anyone can find an operating loss before interest, taxes, etc. in those numbers for the Digital Imaging Group more power to them. Of course if you take the "other charges" not included in those numbers into account, such as the $610 million goodwill write-off from the film group that I mentioned in my previous message, then the two businesses that had losses were FPEG and Graphic Communications. Or maybe there were "other charges" to the CDIG that would result in an overall loss for the group, I don't know. But regardless of anything else, it seems clear that whatever the author of the Bloomberg article might have said or meant, the CDIG didn't have an operating loss before interest, taxes, etc. for 2010.

[Robert Brummitt]

http://www.google.com/hostednews/ap/...536a65f0b52db2

Maybe Kodak is going after bigger fish?