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Kodak focuses on growth
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April 27, 1999: 1:38 p.m. ET
Photography giant targets per-share earnings growth of at least 10% in '99
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NEW YORK (CNNfn) - Saying it has developed a strategy to invigorate its troubled business, Eastman Kodak Co. offered a picture of the future Tuesday that included predictions of double-digit growth within the next five years.
At a meeting in New York, company officials told investors and journalists that they are boosting their efforts in the digital photography business and emerging markets, especially China, and working to consolidate where possible in the industry.
"Kodak plans to achieve top-line growth of 8 to 12 percent by 2004," CEO George Fisher said. "That's an important part of achieving our average annual earnings per share growth target of at least 10 percent, over time."
Fisher said that for 1999, the company is "committed to achieving" per-share earnings growth of 10 percent to 20 percent.
Kodak (EK), the world's largest maker of photographic film and a component of the Dow Jones industrial average, has been struggling to compete as Japanese rival Fuji has slashed its prices. Last week, Kodak reported first-quarter earnings that were just above recently lowered forecasts. The company also said it will buy back up to $2 billion of its stock.
Over the past few weeks, Kodak stock had traded near its 52-week low of 60-13/16, but shares have climbed since. Kodak stock was trading up 5/8 at 77-1/4 at midday Tuesday.
In an interview with CNNfn Tuesday, Kodak President and Chief Operating Officer Dan Carp said he is confident about meeting the company's growth forecasts.
"What you'll see from Kodak is continuous improvement in our productivity and our costs across the whole range while we continue to invest in our brand and continue to invest in R&D," he said.
Carp said the company is moving to expand its move into digitization, which involves partnerships with America Online (AOL) and Intel (INTC).
"The picture business is quite exciting right now because there are new products, new innovation, and the world of digital is coming to pictures, which means there's plenty of opportunity for growth going forward," he said.
As for the sales potential for digital cameras, Carp said the technology still isn't affordable for the mass market, but prices "are coming down, make no mistake about it. And they'll become more and more accessible."
Kodak officials also said Tuesday that the company is investing $1 billion in plant modernization and infrastructure in China, which accounts for $2.2 billion in annual revenue for the company. Kodak is the share leader in both color film and paper in China, which could become the No. 1 photography market within 10 years, the company said.
Also Tuesday, Kodak said it plans to introduce a new type of photographic paper later this year that it says is more durable against tearing and curling.
In its first-quarter results released Friday, Kodak said it earned $259 million, or 80 cents a diluted share, excluding one-time charges. That's up from $237 million, or 73 cents a share, a year earlier. The results beat the revised 76 cents a share consensus of analysts surveyed by First Call, which tracks earnings estimates.
In late March, Kodak said its first-quarter earnings would be 72 to 80 cents a share -- below the 82 cents a share analysts then were forecasting -- due to low film prices, weakness overseas, currency fluctuations and integrating an acquired medical imaging business. 
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Eastman Kodak
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