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Kodak profit tops forecast
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April 17, 2001: 9:49 a.m. ET
Photography leader to cut up to 3,500 jobs, lowers guidance for 2Q
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NEW YORK (CNNfn) - Eastman Kodak Co., the photography company, announced a lower first-quarter profit Tuesday that edged past estimates -- but it cut its second-quarter earnings forecast and announced a reduction of as many as 3,500 jobs.
The Dow Jones industrial average component earned $150 million, or 52 cents a diluted share, although it said it earned 54 cents a share from operations. That's down from the 95 cents a share the company earned in the year-earlier period.
Analysts surveyed by earnings tracker First Call estimated the company would earn 51 cents a share in the most recent period. An official with First Call said the 54 cent number is the most valid comparison to estimates.
Sales fell 4 percent to $2.98 billion in the period, but the company said most of that decline was due to the company shaving units and changes in currency exchange rates. It said excluding those effects sales fell 1 percent in the period.
Kodak (EK: down $2.30 to $41.20, Research, Estimates) said it now expects to earn between $1 and $1.30 a share in the second quarter, which will likely put it below First Call's forecast of $1.27 a share for the period. It also withdrew its previous guidance for full-year results.
Daniel Carp, the company's CEO, said that the company's market share and even pricing for film are not bad, but given recent reports about the U.S. economy, it no longer expects the rebound in the second half that it had been counting on to lift profits. He told CNNfn's Before Hours that the company is concerned that the Asian and European economies are also going to slow before they improve.
"I would really be here quite happy, but we see troubled waters ahead," he said. "It's primarily driven by so many layoffs occurring and some weakness in the Asian markets. We are just saying, hey look, this is going to be a tough ride this year. When this thing comes back, we should be in a good position." (333K WAV) (333K AIFF)
The company said its own job cuts, which will eliminate about 3 to 4 percent of the worldwide work force of 78,400, will save the company $50 million this year and produce annualized savings of between $200 million and $250 million by the end of next year. The company expects to take a restructuring charge that will come to $375 million to $450 million on a pretax basis later this year. 
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