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Kodak issues profit alert
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September 15, 1997: 6:32 p.m. ET
Film titan's stock plunges after again warning of weak performance
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NEW YORK (CNNfn) - Shares in Eastman Kodak Monday took what has become a regular quarterly dive, as the company said sales and earnings will again fall below expectations.
The company pledged to cut "chronic money losers" and cut its cost structure to turn the company around.
Kodak's stock unloaded 4-5/8 points at 60 in after-hours trading, after dipping 7/8 before the bell on the New York Stock Exchange.
Coming on the heels of two weak quarters, Kodak based its performance warning on a strong dollar and the competitive pressures brought by effectively lower prices.
The strong dollar has erased more than $200 million in sales and 14 cents per share in earnings for the first half of 1997, Kodak said. If the dollar stays at its current level, the company said it will lose $550 million in sales and 45 cents in earnings for the full year.
"If the weak operating performance in July and August were to continue through September, earnings would be significantly lower than the 1996 third quarter," Kodak chairman George Fisher said in a statement. "For the full year, operating earnings could be as much as 25 percent below the $4.50 per share operating earnings achieved in 1996."
A consensus of estimates puts Kodak earnings at $1.21 per share for the third quarter and $4.39 for the fiscal year.
Kodak spokesman Paul Allen refused to specify which areas would face scrutiny under the company's pledge to eliminate non-strategic divisions.
"What we're doing here in very broad terms is outlining the actions we're going to take," Allen told CNNfn. "It's premature for us to try to comment further at this point."
In a letter to Kodak employees, Fisher and company president Daniel Carp blamed the situation in part on fierce competition.
"Fuji is exploiting its profit sanctuary in Japan to gain market share in the U.S., driving an aggressive attack on our position here while two-thirds of its home market remains protected," they said in the letter.
Japanese market protections have long stood as a bone of contention between the two imaging giants.
Also in the letter, Kodak hinted at what divisions will take precedence in its efforts to strengthen the company. It pledged to continue investing in its not-yet-profitable digital business as well as in volatile emerging markets, according to the letter. 
--Will Morton
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Eastman Kodak Co.
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