Kodak and its shares snap back with a better earnings picture

2Q profit spurts 38%, and stock jumps 9.1%

July 22, 2004|By BLOOMBERG NEWS

NEW YORK - Eastman Kodak Co., the world's biggest photography company, reported yesterday that its second-quarter net income rose 38 percent as sales of digital cameras increased and Chief Executive Officer Daniel Carp cut costs.

The company's shares jumped 9.1 percent, their biggest daily gain in six months.

Profit rose to $154 million or 54 cents a share, from $112 million, or 39 cents, a year earlier, Carp said. Profit, excluding the costs of job cuts and plant closures, was 88 cents a share, higher than the company's April forecast of 55 cents to 65 cents. Revenue rose 6 percent to $3.5 billion.

Revenue from Kodak's digital products rose 48 percent as Carp made acquisitions and devoted research and marketing efforts to the digital business. Consumer sales jumped 91 percent with the introduction of a new line of Easyshare cameras and a printer dock that's compatible with competitors' cameras.

"We were extraordinarily happy with the digital business, which did very well in the quarter," said Vincent Muscolino, portfolio manager for Babson Capital Management LLC. "They're also managing costs aggressively."

Sales of traditional photographic products fell by 8 percent in the quarter, prompting the company to accelerate cost cuts.

Kodak said it has already cut 2,700 positions through the second quarter and will cut 800 to 1,300 more by the end of the year. The company previously had targeted 2,500 to 3,500 job cuts this year, of a total of 12,000 to 15,000 through 2006.

The company also raised its full-year forecast for earnings from continued operations to a range of $2.39 to $2.69 per share.

Debt declined $208 million, to $3.04 billion.

Kodak shares rose $2.25 or 9.1 percent to $27.05 in New York Stock Exchange composite trading.

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