This can't be good

[metaT8]

http://www.usatoday.com/money/companies ... htm?csp=34

[Blue Audio Visual]

The film, photofinishing and entertainment unit more than doubled its operating profit to $39 million from $17 million despite a 27% drop in sales to $652 million

...a bit further down the page.

[marc]

".....The film, photofinishing and entertainment unit more than doubled its operating profit to $39 million from $17 million despite a 27% drop in sales to $652 million. Sharp cost reductions and lower retiree benefits were partially offset by a slide in consumer film sales and higher silver costs.

Through 2011, Kodak has said it expects revenue to rise 5% a year, driven by a 10% to 12% annual rise in digital sales. Operating profit, it forecasts, will more than triple to $1 billion......"

"Sharp cost reductions" .....Hmm, I wonder if that means reductions in the cost of cartridge manufacturing or procurement? Which would explain shoddy cartridges!

[Andreas Wideroe]

I wonder if something's going on at Kodak. My Kodak rep phoned me today and informed me about higher filmprices, but he also said that he had something to tell me as soon as things got confirmed. At the moment there were only rumors, but I got the feeling something bad is to be decided...

[marc]

, but he also said that he had something to tell me as soon as things got confirmed. At the moment there were only rumors, but I got the feeling something bad is to be decided...

A new film stock for super 8? Or discontinuation of the format altogether?

[super8man]

Time to sell your cameras boys and girls!!! Ebay dumping ground!!!

[Jim Carlile]

According to the story, the photochemical and MP division made more money than last year, and didn't lose money as did the rest of the company. So it would be crazy for them to mess with this division too much-- they are obviously doing something right, and there's plenty of wiggle room there to adjust prices upward.

Kodak has long wanted to dump its film manufacturing, but can't find a buyer. I suspect that might be the news. They lost MUCHO money last year on their printers and need to get it back somehow, and Wall Street hates film.

[super8man]

It's also a safe bet the majority of Americans hate "Wall Street" too (but not the movie - I love that one...)

[marc]

Time to sell your cameras boys and girls!!! Ebay dumping ground!!!

I looks like Regular 8 is ready to take the lead again! Darn, I wish I had kept my H8 Rex and it's myriad accessories! They don't get any better than that for Regular 8!

[marc]

Kodak Looks Best Through A Long-Range Lens
Carl Gutierrez, 01.29.09, 08:15 PM EST
Image company has a rough quarter and cuts staff, but if it can make it through the recession it has a rosier future.

Things look fuzzy for Eastman Kodak right now, but if the venerable imaging company can get through the current recession, its outlook will be brighter. The trick is for the company to sheds its manufacturing fat and becomes more of an intellectual property and marketing operation.

Kodak's fourth-quarter earnings report reminded investors it still has a long way to go. On Thursday it joined the January job-cut parade and posted a surprisingly steep loss, dimming hopes investors had for near-term profit growth.


As hard as it is to believe though, the company should make it in the long run. Though it has no shortage of issues, Kodak has been improving and the quarter's painful drop in digital sales was largely because the nasty U.S. recession. Investors can take some solace in Kodak ending the year with a cash balance of more than $2.1 billion, which it said was in complete compliance with its terms of its revolving credit agreement.

Ulysses Yannas, a broker for Buckman, Buckman & Reid in New York, was optimistic, noting the company is becoming lean as it sheds physical assets and concentrates on brainpower.

"I don't see that there's any fat left, which says that when and if this thing turns around, you're going to have a wild ride," Yannas told the Associated Press. The firm's sales fell 25.0% during the fourth quarter of 2008, mostly from a 21.7% drop in digital products, the area that it is trying to foster. Kodak said Thursday it is cutting 3,500 to 4,500 jobs, or 14.0% to 18.0% of its work force. It also posted a huge loss of 51 cents per share.

Taking out hefty charges from restructuring and one-time items, the company lost only 8 cents per share, but it was still way off from the 21 cents per share profit Wall Street expected.

“The second half of 2008 will go down in history as one of the most challenging periods we have seen in decades,” said Kodak's chief executive, Antonio Perez.
Comment On This Story

Kodak's problems have made it a hard stock to love. The image company was once a titan of the photo and film industry, but became the poster-child of the evolutionarily challenged by refusing to go digital. When it finally did, its market clout was vanquished and it's still in the process of climbing back.
Real-Time Quotes


Thursday's report only made things worse, sending Eastman Kodak (nyse: EK - news - people ) shares down 29.4%, or $2.08, to $4.99. The company's stock has been on a decade-long slide since trading around $85 in the summer of 1998.

Kodak's sales for the 2008 fourth quarter were $2.4 billion, well below the $3.2 billion reported in the previous year's corresponding period, and short of $2.8 billion analysts had forecast. Its loss totaled $133.0 million, an inversion of the $92.0 billion, or 31 per cents, earned the previous year.

[aj]

Better ask Kodak or a bigtime reseller like Wittner and Andec. Instead of these negative speculations.

[S8 Booster]

The Times They Are A-Changin' | Bob Dylan

they always do...

shoot....

[RichardB]

Its not surprising Kodak are trying to run film into the ground, when they appoint a CEO in 2003 that until then had been a long time executive of Hewlett Packard. Kodak's core competencies have never been in anything remotely like desktop printers, couldn't he try and use the massive amounts of learning that come from an organisation like Kodak and put it to a better means? Being too focused on your rivals makes for inefficient strategy, Kodak should both look at their internal strengths and use them in profitable markets where the resulting skills are at least closely aligned with photography, and then look to create new markets, as opposed to failing to provide either convincing low cost or differentiation strategies in ones dominated by exisiting firms.

[marc]

Even Still, Kodak Clings to Film
source: Democrat and Chronicle (NY)


kodak
Doug Pasono of Greece is an operator in the Main Control Room for film making at Kodak. Kodak expects to still have a film business in 10 years but acknowledges it will be smaller.
(ANNETTE LEIN staff photographer)



Rochester, New York--January 2009-- The Ektar 100 comes in a little yellow box, like generations of Eastman Kodak Co. camera film before it.

A fine-grain film aimed particularly at nature and travel photographers, Ektar 100 was launched in October, and batches of it are churned out regularly from Building 38 at Eastman Business Park - Kodak's sprawling manufacturing site straddling Rochester and Greece.

Little yellow boxes of camera film were long the building blocks of Kodak - which in turn was the major force in the Rochester area economy for much of the 20th century. But between 2004 and 2007, Kodak spent $2 billion in cash and took $3.3 billion in restructuring charges as it shed 27,000 jobs, demolished numerous manufacturing buildings and worked to remake itself into a digital imaging business.

Yet even as sales of Kodak's consumer and professional camera films continue their rapid spiral downward due to digital photography, the company continues to invest in new lines of films and the revamping of others. And the company remains steadfast that camera film will continue to be a part of its business, though admittedly increasingly a niche product.

"You come back in 10 years, there will be a film business here," said Joel T. Proegler, general manager of film capture and a vice president in Kodak's film, photofinishing and entertainment group. "It'll be smaller. Maybe there will be a bigger space between innovations."

Kodak's film business doesn't come cheap. The company would not say what kind of costs come with putting out a product such as the Ektar 100. But for the company's third quarter of 2008, ending Sept. 30, its film, photofinishing and entertainment group spent $11 million on research and development, as well as $93 million on operating that group. For that same three-month span, according to documents filed with the U.S. Securities and Exchange Commission, Kodak spent $583 million on the cost of goods sold, such as raw materials and production expenses.

Along with rolling out Ektar last year, Kodak revamped its Portra line of professional photography film in 2006 and its T-Max 400 professional photography film in 2007. In 2008, Kodak put out new lines of Portra 400NC and 400VC film, with a finer grain.

More than half the professional photography market still uses camera film occasionally, said Scott R. DiSabato, marketing manager for Kodak's professional film operations. "We call it the 'and' world," DiSabato said. "We know the professional use will be significant enough the next couple years, we'll get the investment (into those film lines) back."

Amy Postle, a New York City-based professional photographer, shoots both film and digital, using film about 75 percent of the time, and Kodak product exclusively.

"When I dreamt of being a photographer as a child ... it was to be a photographer, not a digital technician," she said. Photographers now "spend countless hours on the computer making the images look like they were shot on film," she said.

Influence

Meanwhile, at the Photo Marketing Association's 2008 international trade show held in early 2008 in Las Vegas, Kodak introduced one-time-use cameras loaded with its new 800-speed film. Last year it started a new business line of personalized one-time-use cameras with specialty label printing for such events as weddings. The company plans to do a larger launch of the cameras, sold in batches of 10, in 2009. The company comes out with new or revamped film products yearly, Proegler said.

All Kodak's film capture products are in decline, "but all are profitable," Proegler said. "The only problem we have is we're getting smaller."

Much of that profitability came as Kodak did its massive, four-year restructuring that largely wrapped up in 2007, taking out costs well beyond what the company needed to at the time, building in future declines in film, Proegler said.

The revamped and new film lines are aimed at helping keep the film customers the company still has, Proegler said. "We're not walking away from film," he said. By coming out with new or improved film products, "it gives people the incentive to continue to use film," he said. "If we acted like film was going away, we kind of influence it."
Film still represents a sizable portion of Kodak's finances. For the first three quarters of 2008, Kodak's film, photofinishing and entertainment group had $2.3 billion in sales, representing roughly a third of its overall sales and more than the $2.1 billion its consumer digital imaging group took in. But consumer digital imaging is growing, with its net sales up 13 percent from the first nine months of 2007, while the film, photofinishing and entertainment group sales were down 15 percent from the first nine months of 2007.

Most of that decline in the film group is due to the decline in film capture and traditional photofinishing. And Kodak - which is in the midst of letting go of most of its North Carolina-based photofinishing subsidiary Qualex Inc. - has plenty of company in the legions of businesses feeling the pinch of camera film's decline.

The United States arm of competitor Fujifilm did not return calls seeking comment. But according to financial filings, the Japanese-based film giant saw its film business down 34 percent year over year for the first half of its 2009 fiscal year, which ended Sept. 30. The company chalked that decline up to the shrinking global market for camera film and said that in response it has been closing and consolidating photofinishing labs in Europe and North America.

Polaroid Corp. announced in 2008 it was ending its instant film manufacturing. According to Polaroid, its film products will be available on shelves until, at the latest, fall 2009.

And last month drug store chain Rite Aid Corp., in announcing its third-quarter 2009 earnings, said its photo developing business was hurting from a continuing decline in one-hour photo developing. Rite Aid, the dominant drug store chain in the Rochester area, signed an exclusive deal with Fujifilm in 2008, with Rite Aids now offering only Fujifilm photos products and services.

Future

The $64,000 question, of course, is how much life film has left.

At Rochester Institute of Technology's School of Photographic Arts and Sciences, a fairly large percentage of faculty have not talked film in years, said Chairman Andrew Davidhazy.

Kodak in 2005 estimated that, given the rapid decline of its film and photo paper business, its manufacturing equipment had at most a useful lifespan of three to five years, while its buildings had a lifespan of five to 20 years. In early 2008, the company revised some of those estimates, and now expects that buildings and equipment which were to fully depreciate by mid-2010 now will have useful lives through 2011 to 2015.

The area's dominant grocery chain, Wegmans Food Markets Inc., in 2008 shuttered its Henrietta photo lab and the photo departments at 62 stores as its digital print and photo product ordering were not growing quickly enough to offset the loss of business from traditional film sales and processing.

Local technology retail chain Rowe Photographic, Video & Audio still has its Greece photo developing lab but earlier this year shut down its E6 slide processing service because of low volume.

"I see film as a nonissue, pretty much," owner Richard Rowe said. "The prices continue to escalate. At a certain point in time, even the purists are going to say this is way too much of an investment."

On local store shelves, a single roll of Kodak-brand consumer camera film often retails for $5 to $6.

"Unless there is a resurgence in traditional photography, which might be very much a niche market," Rowe said, "I see this probably winding down in the next two years."

[Jim Carlile]

I still find it ironic that the only part of the company that made money in the fourth-quarter was the film division!

This is as I predicted a couple months ago-- it's happened all the time at Kodak through the years. Film gets badmouthed but it makes the profit!

The financial wags like to rationalize this success as being the result of personnel cutbacks and accounting drawdowns, but so what? All the other divisions did that too and they all lost money!

Part of the media narrative here is that film is a big, dorky loser. And they just won't drop it. This is so much the case that even the major headlines to this story blatantly lie about the problem. They claim that all Kodak divisions lost money across-the-board, when in fact it was digital that sank. And no article anywhere mentions the sad fact that almost every American corporation lost money in the 4th quarter, if not the entire year.

This is all a great opportunity for the little three (Spectra, Wittner, Super 8 Sound.) But Kodak is not going to get out of the MP film business for quite awhile. And as super 8 is seen as a gateway, it will be around.

Even if they shut down S8 production tonight, it'll be two years before we feel it from them-- that traditionally is how long it takes for supplies to disappear. Right now they are probably working those soon-to-be-laid-off employees hard to get a backlog going. What else are they going to do with them?-- the job cuts won't occur until late spring all the way to the end of the year.