|
Kodak 2Q above forecast
|
 |
July 21, 1999: 11:38 a.m. ET
Photo company plans 2,000-2,500 job cuts, $300M pretax charge in 3Q
|
NEW YORK (CNNfn) - Eastman Kodak, whose cost-cutting efforts helped boost its second-quarter earnings results slightly past analysts' estimates, said Wednesday it will cut another 2,000 to 2,500 jobs and take a $300 million pre-tax charge in a continuation of its restructuring.
Investors appeared happy with the news. Shares of Eastman Kodak (EK), one of the Dow Jones industrial average issues, were up 1-11/16 at 74-15/16 in early morning trade Wednesday.
Kodak, plagued by fierce competition in its photography business, said sales growth, reduced operating costs and gains in manufacturing productivity contributed to earnings of $491 million, or $1.52 per diluted share, compared with $495 million, or $1.51 per share, in the year-earlier quarter.
Analysts' consensus estimate was for the company to earn $1.51 a share, according to forecast-tracking firm First Call.
The company said the latest restructuring moves, which will result in the charge to be taken in the current third quarter, are part of a two-year effort to reduce costs by $1.2 billion. Among the moves planned is the closing or reduction in operations of some of its facilities, including two in Rochester, N.Y., where the company is based.
Gain helped year-earlier quarter
The company noted that excluding a gain from Gretag Imaging's initial public offering in last year's second quarter, earnings for the 1999 second quarter were up 9 percent, or 14 cents per share.
Operating earnings rose 9 percent to $716 million. Sales for the quarter rose to $3.61 billion from $3.54 billion a year ago.
Sales also were up year-to-date, rising to $6.71 billion for the first six months of the year from $6.45 billion in the 1998 period.
In terms of net earnings, however, year-to-date results came in shy of the company's 1998 figures due to charges taken in the first quarter related to its exit from several businesses and product lines.
For the first six months of 1999, net earnings were $682 million, or $2.11 per diluted share, down from $720 million, or $2.20 a share, a year earlier.
Excluding the charges, earnings per share increased 10 percent to $2.32.
Results meet company target
Kodak said its quarterly results were on track with its cost-reduction plan. It noted that it expects to hold on to its share in the highly competitive U.S. market, where it has had to do battle with Fuji Photo Film Co. (FUJIY).
"Our U.S. consumer market share remains on track, with volume share down less than one percentage point for the quarter, but unchanged year to date," said George Fisher, Kodak's Chairman and CEO, who announced last month he would resign as CEO next January. "We fully expect to meet our strategic goal of at least holding share for the full year, while improving the quality of our product mix toward the premium end."
Fisher said that excluding the third-quarter charge, "we believe we are on track to deliver on our previously disclosed range of earnings per share of $2.58 to $2.85 during the second half of this year."
Not including the measures announced Wednesday, the company has taken charges totaling about $1.5 billion and cut 17,700 jobs in connection with the restructuring program, company spokesman Charles S. Smith said.
|
|
|
|
|
|
Eastman Kodak
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
