NEW YORK (CNN/Money) -
Eastman Kodak Co. said Thursday it will enter the ink-jet printer business and no longer invest in its traditional film business, cutting its annual dividend by 72 percent in an effort to raise cash for its corporate makeover.
Shares of Kodak (EK: down $3.74 to $23.25, Research, Estimates), a component of the Dow Jones industrial average, fell more than 13 percent in afternoon trading on the New York Stock Exchange
The company said its board approved a recommendation to lower its annual dividend to 50 cents a share from $1.80. The new rate will be effective Dec. 12 for stockholders of record as of Nov. 3.
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 Eastman Kodak announces a shift to digital products away from its traditional film market. CNNfn's Chris Huntington reports.
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Kodak's plans to enter the printer market will put it in competition with entrenched consumer electronics firms including Hewlett-Packard (HPQ: Research, Estimates), Canon (CAJ: Research, Estimates), Seiko's Epson, Lexmark (LXK: Research, Estimates), and computer vendor Dell (DELL: Research, Estimates), which recently started selling relabeled printers manufactured by others.
At the same time, Kodak will not make any more significant investments in traditional consumer film, though it will make private-label film to sell under non-Kodak brand names internationally, the spokeswoman said, confirming a report in the Wall Street Journal.
Traditional film photography is under pressure due to the growing popularity of digital still cameras. Consumers increasingly print these pictures at home on ink-jet printers.
Kodak already has expanded into digital still cameras and more recently began building its professional digital printing business in areas such as health care, in competition with Xerox Corp. (XRX: down $0.10 to $10.42, Research, Estimates)
The plan could cost as much as $2 billion for moderate-size acquisitions over the next three years and more investment in the new growth areas.
Additionally, Kodak is likely to sell or close about $1 billion worth of an array of businesses, including the slide-carousel group, which could mean more job losses.
Kodak expects the strategy to increase revenue by 5 or 6 percent a year, though it will not achieve 6 percent growth this year.
The company said it will strive to reduce net debt to below the $2.0 billion it held at the end of 2002, adding it expects to be able to report annual earnings per share of $3.00 by 2006.
--from staff and wire reports
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