Eastman Kodak has today reported revenues of $2.975 billion and net earnings of $150 million ($0.52 per share) for Q1 2001. Segment results were: "Other Imaging" (which includes digital cameras) up 1%, Consumer Imaging sales down 7%, Kodak Pro sales down 11%, Health Imaging up 15%. "These results are in line with the expectations we set last December and reaffirmed in January when we reported year-end 2000 results,'' said Daniel A. Carp. UPDATE: Kodak to cut at least 3,000 jobs, blames slow down in film sales and drop in prices of film media.
Phil: What I find interesting looking at the figures (bottom of this article) are that "Other Imaging" earnings are down from $86m in Q1 2000 to $44m in Q1 2001 (49% drop), Kodak Pro earnings are down from $68m in Q1 2000 to $49m in Q1 2001 (28% drop).
Kodak Reports First Quarter 2001 Sales & Earnings
Results Within Earlier Company Guidance
$375-$450 Million Restructuring Charge Planned
ROCHESTER, N.Y. -- April 17, 2001 -- Eastman Kodak Company today reported revenues of $2.975 billion and net earnings of $150 million, or $.52 per share for the first quarter of 2001, in line with guidance provided by the company in January. On an operational basis, excluding a charge of $.02 per share, net earnings were $.54 per share.
The company also announced it expects to take a restructuring charge of approximately $375 million to $450 million pre-tax, primarily in the second quarter, but with a portion to be taken in the third quarter. The charge is expected to include a reduction of about 3,000 to 3,500 jobs worldwide. The restructuring will address a number of initiatives currently in the planning stages and is focused on continuing improvement in Kodak's cost structure and operational effectiveness. The anticipated pre-tax savings from these actions are expected to total approximately $50 million in 2001 and have a run-rate impact, by the end of 2002, between $200 million and $250 million. Additional information will be provided at the company's upcoming investor meeting, scheduled for May 2 in New York City.
For the first quarter:
- Sales totaled $2.975 billion, a decline of 4% from $3.095 billion
in the first quarter of 2000. Excluding adjustments to the business
portfolio and the negative impact of currency, sales were down 1% from
a year ago.
- Net earnings were $150 million, or $.52 per share, compared with $289
million, or $.93 per share in the first quarter of 2000. Excluding a
2001 charge of $.02 per share, related primarily to the exit of an equipment
manufacturing facility, net earnings were $.54 per share on an operational
basis, compared with $.95 per share on an operational basis last year.
Earnings were reduced by lower gross profit margins, the adverse effects
of foreign exchange and higher interest expense, reflecting higher debt
- Earnings from operations were $262 million, compared with $456 million in the comparable 2000 quarter.
"These results are in line with the expectations we set last December and reaffirmed in January when we reported year-end 2000 results,'' said Daniel A. Carp, Chairman and Chief Executive Officer. "The slowdown in photo industry activity, which essentially flattened out in this quarter, is entirely consistent with the overall slowdown in the U.S. economy. We see nothing in the form of negative trends unique to our industry. We had a modest increase in our U.S. film share in the quarter, despite a highly competitive market, and we are confident that any improvement in the economy will have a corresponding effect on our business.
"The restructuring we are announcing today will enable us to build a stronger, more competitive business by taking out cost in a very strategic and targeted way,'' Carp noted. "We will continue to work hard to position ourselves to take advantage of an eventual economic upturn, but like many others in corporate America today, we are hesitant to speculate as to when that upturn will occur.
"To that end, we do not believe it is prudent to provide guidance beyond the second quarter and we are withdrawing our previously announced full-year guidance of $4.50 to $4.90 per share. We expect our second quarter results to fall in the range $1.00 to $1.30 per share.
"Finally, let me add a very positive note to our business outlook -- and that is the arrival of Patricia F. Russo, our new President and Chief Operating Officer, who officially began her new job yesterday. Pat's leadership, management experience and knowledge of the information technology industry will be a tremendous asset to Kodak as we lead the way into the converging worlds of imaging and information management technologies.''
First-quarter segment results:
- Consumer Imaging segment sales totaled $1.397 billion, down 7%. Adjusted
for portfolio changes and currency impact, sales were down 5%. Earnings
from operations for the segment were $61 million, compared with $184
million a year ago. While sales of most major product categories were
down, worldwide sales increased for one-time-use cameras, APS film,
reloadable cameras and Picture Maker kiosks and related media.
- Health Imaging sales were $561 million, up 5%. Adjusted for currency,
sales were up 9%. Earnings from operations for the segment were $108
million, down 8% from $118 million in last year's quarter. Sales of
Dry View media and computed radiography products were up substantially
in the quarter.
- Kodak Professional sales were $367 million, a decline of 11%. Adjusting
for unfavorable exchange, sales were down 8%. Earnings from operations
for the segment were $49 million, compared with $68 million a year ago.
The business continued to experience lower sales to Kodak Polychrome
- Other Imaging segment sales were $650 million, up 1%. Adjusted for currency and portfolio changes, sales were up 4% from a year ago. Earnings from operations for the segment were $44 million, compared with $86 million a year ago. The segment saw higher sales of motion picture products and services, as well as sharply higher sales in commercial and government services. Digital camera sales recovered late in the quarter as the company regained market share for the quarter.
Certain statements in this news release may be forward looking in nature, or "forward-looking statements'' as defined in the United States Private Securities Litigation Reform Act of 1995. For example, references to the Company's earnings expectations for second quarter 2001 are forward-looking statements.
Actual results may differ from those expressed or implied in forward-looking statements. The forward-looking statements contained in this news release are subject to a number of risk factors, including: the Company's ability to implement its product strategies (including its category expansion and digitization strategies and its plans for digital products and Advantix products), to develop its e-commerce strategies, and to complete information systems upgrades; the successful completion of various portfolio actions; the ability of the Company to reduce inventories, improve receivables performance, and reduce capital expenditures; the inherent unpredictability of currency fluctuations and raw material costs; competitive actions, including pricing; the ability to reduce spending and realize operating efficiencies, including a significant reduction in SKU's; the ability to achieve planned improvements in Kodak Professional; the nature and pace of technology substitution; the ability of the Company to develop its business in emerging markets like China and India; general economic and business conditions; and other factors disclosed previously and from time to time in the Company's filings with the Securities and Exchange Commission.
Any forward-looking statements in this news release should be evaluated in light of these important risk factors.
Additional detail about Kodak's first quarter results is available on
the company's web site on the Internet at the following url:
Eastman Kodak Company and Subsidiary Companies CONSOLIDATED STATEMENT OF EARNINGS (in millions, except per share data) First Quarter 2001 2000 Sales $2,975 $3,095 Cost of goods sold 1,908 1,834 ------ ------ Gross profit 1,067 1,261 Selling, general and administrative expenses 574 568 Research and development costs 189 201 Goodwill amortization 42 36 ------ ------ Earnings from operations 262 456 Interest expense 61 37 Other income (charges) 23 19 ------ ------ Earnings before income taxes 224 438 Provision for income taxes 74 149 ------ ------ Net earnings $ 150 $ 289 ====== ====== Basic earnings per share $ .52 $ .93 ====== ====== Diluted earnings per share $ .52 $ .93 ====== ====== Earnings used in basic and diluted earnings per share $ 150 $ 289 Number of common shares used in basic earnings per share 290.1 310.2 Incremental shares from assumed conversion of options 0.4 2.1 ------ ------ Number of common shares used in diluted earnings per share 290.5 312.3 ====== ====== Cash dividends per share $ .44 $ .44 ---------------------------------------------------------------------- SUPPLEMENTAL INFORMATION - UNAUDITED (in millions) Provision for depreciation $ 188 $ 180 After-tax exchange gains (losses) and effect of translation of net monetary items - (7) Cash dividends declared 128 136 Capital expenditures 196 140 Cash and marketable securities 251 421 Net working capital, excluding short-term borrowings 1,775 1,484 Sales by Operating Segment (in millions) First Quarter 2001 2000 Change Consumer Imaging Inside the U.S. $ 645 $ 690 - 7% Outside the U.S. 752 817 - 8 ------ ------ --- Total Consumer Imaging 1,397 1,507 - 7 ------ ------ --- Health Imaging Inside the U.S. 268 245 + 9 Outside the U.S. 293 289 + 1 ------ ------ --- Total Health Imaging 561 534 + 5 ------ ------ --- Kodak Professional Inside the U.S. 149 155 - 4 Outside the U.S. 218 257 -15 ------ ------ --- Total Kodak Professional 367 412 -11 ------ ------ --- Other Imaging Inside the U.S. 347 306 +13 Outside the U.S. 303 336 -10 ------ ------ --- Total Other Imaging 650 642 + 1 ------ ------ --- Total Sales $2,975 $3,095 - 4% ====== ====== === ---------------------------------------------------------------------- Earnings from Operations by Operating Segment (in millions) First Quarter 2001 2000 Change Consumer Imaging $ 61 $184 -67% Percent of Sales 4.4% 12.2% Health Imaging $108 $118 - 8% Percent of Sales 19.3% 22.1% Kodak Professional $ 49 $ 68 -28% Percent of Sales 13.4% 16.5% Other Imaging $ 44 $ 86 -49% Percent of Sales 6.8% 13.4% ---- ---- --- Consolidated total $262 $456 -43% ==== ==== === Percent of Sales 8.8% 14.7% ---------------------------------------------------------------------- Net Earnings by Operating Segment (in millions) First Quarter 2001 2000 Change Consumer Imaging $ 51 $140 -64% Percent of Sales 3.7% 9.3% Health Imaging $ 73 $ 80 - 9% Percent of Sales 13.0% 15.0% Kodak Professional $ 31 $ 34 - 9% Percent of Sales 8.4% 8.3% Other Imaging $ 35 $ 56 -38% Percent of Sales 5.4% 8.7% ---- ---- --- Total of segments $190 $310 -39% Percent of Sales 6.4% 10.0% Interest expense (61) (37) Other corporate items 2 5 Income tax effects on above items and taxes not allocated to segments 19 11 ---- ---- Consolidated total $150 $289 ==== ==== Percent of Sales 5.0% 9.3% ----------------------------------------------------------------------
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