Compared with 4Q 2002, Kodak’s 4Q 2003 operating profits rose 7 percent, up to $0.70 per share – considerably better than Wall Street analysts’ expectations of $0.52. Net profits (including one-time charges, etc.) were $19 million/$0.07 per share, 83 percent lower than the year-before quarterly figures of $113 million/$0.39 per share. The company announced it plans to cut 12,000 to 15,000 employees worldwide over the next three years. This will eliminate nearly one out of every four jobs at Kodak, but the company’s quarterly financial report says the drastic cuts are necessary. Kodak must continue downsizing in line with declining film sales (an 8 percent drop in 2003), while still having money available to invest in digital photography. CEO Dan Carp said, "We anticipate generating enough cash flow in 2004 to pay down debt while maintaining the required level of investment to pursue our strategic objectives."
Photography segment sales totaled $2.618 billion in the 4Q 2003, up 9%. Earnings from operations for the segment were $141 million on a GAAP and an operational basis, down from $174 million a year ago. Some of the brighter notes included digital imaging. Kodak announced that in 2003, its digital photography products and services became profitable for the first time. Company president and chief operating officer Antonio Perez said Kodak digital products "had a tremendous fourth quarter." Sales of Kodak’s EasyShare consumer digital cameras surged by 87 percent and the Ofoto online photofinishing division had a 55 percent increase in sales.
Kodak plans to further strengthen its position in digital cameras, according to The Financial Times, by completing its purchase of Japanese camera manufacturer Chinon Industries, which manufactures digital cameras for Kodak. Kodak already owns 59 percent of Chinon and is offering $30-plus million for the remaining Chinon stock through Kodak’s wholly-owned subsidiary, Japan Digital Product Development.
For the year, sales of Eastman Kodak Company were $13.317 billion, up 4% compared with $12.835 billion in 2002. Excluding the impact of currency, sales were down 1% compared with a year ago. Net earnings for the year totaled $265 million, or 92 cents a share, compared with $770 million, or $2.64 per share, in 2002. Excluding the discontinued operations, earnings from continuing operations totaled $238 million, or 83 cents per share. Excluding the impact of focused cost reductions and other one-time items, earnings from continuing operations in 2003 were $662 million, or $2.31 per share. In 2002, earnings from continuing operations, excluding focused cost reductions and other one-time items, were $787 million, or $2.70 per share.
For 2004, Kodak expects operational per-share earnings to range between $2.25 and $2.55, and GAAP earnings to range between 80 cents and $1.30.