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Kodak tops estimates, warns
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January 24, 2002: 11:53 a.m. ET
Warns on 1Q, 2Q as profit and revenue fall, but sees strong cash flow.
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NEW YORK (CNN/Money) - Eastman Kodak Co. reported a sharp drop in fourth-quarter profit Thursday and warned about first- and second-quarter results for 2002, although it topped analysts' forecasts for the recently completed period.
The world's largest maker of photography products earned $36 million, or 12 cents a share, excluding special items. That's down from $200 million, or 68 cents a share, it earned a year earlier. Analysts surveyed by earnings tracker First Call forecast that earnings would fall to 11 cents a share in the period.
Including special charges the company posted a net loss of $206 million, or 71 cents a share, compared with the net income of $194 million, or 66 cents a share a year earlier.
Revenue in the quarter fell to $3.4 billion from $3.6 billion but topped forecasts of about $3.2 billion. Photography and health imaging, such as X-rays, saw revenue decline, while the company saw revenue gains in commercial imaging, which includes commercial and government systems, document imaging and graphics.
The company said it now expects to earn between 5 and 15 cents a share in the first quarter, rather than the 23 cent EPS forecast from First Call, and that second-quarter EPS should be between 60 and 70 cents, rather than First Call's EPS forecast of 81 cents. It marked the fourth straight period that the company issued an earning warning when releasing quarterly results.
For the year, the company is looking for EPS of $2.00 to $2.60, compared with the First Call forecast of $2.41. But the company also said that it is looking for revenue of $13.4 billion in the year, up from $13.2 billion it saw in 2001 and well above the First Call forecast of $12.8 billion.
The company also said it expects to generate $6 billion in cash flow after dividends during the next six years, which represents income plus depreciation and other special charges. The company said that amount of cash flow will allow it to maintain its dividend, pay down debt and make acquisitions.
Still, Kodak Chief Financial Officer Bob Brust said he did not expect a solid economic rebound until next year. "We are not currently expecting an economic recovery in 2002, but we are factoring in a recovery in 2003," he told analysts.
Shares of Kodak (EK: up $1.51 to $28.01, Research, Estimates), a component of the Dow Jones industrial average, were sharply higher in morning trading Thursday. 
Reuters contributed to this report
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