Kodak sees 2009 loss, seeks partners for growth

2009-11-15

NEW YORK (Reuters) - Eastman Kodak Co (EK.N), battered by the weak economy, forecast a wider-than-expected loss and said revenue could drop as much as 18 percent this year.

The photography company also said it was seeking partners to develop growth technologies such as camera sensors.

Kodak, in a statement on Wednesday ahead of an investor meeting in New York, said it expects revenue to drop 12 percent to 18 percent in 2009, leading to a loss from continuing operations of $200 million to $400 million.

Analysts had expected a 2009 loss of only $35 million, according to Reuters Estimates.

In the statement, Chief Executive Antonio Perez said the company's balance sheet is "solid", but that it sees "no immediate signs of economic recovery."

Compounding its woes, the recession has pushed Kodak's consumer customers to scale back on vacations and other events that typically spur use of photography services. Meanwhile, businesses have reduced spending on printing systems.

"It has been a very difficult year to plan for," Perez said at the meeting of its 2009 outlook.

One year ago, before the worst of the economic downturn, Kodak's outlook was much rosier. It had anticipated revenue by a compound annual growth rate 5 percent from 2008 to 2011. At that time, Kodak said it had completed an expensive four-year restructuring that transformed it into a maker of digital photography products and printers.

During that restructuring, Kodak halved its workforce.

The new forecast comes about a week after Kodak posted a quarterly loss and said it would cut up to 4,500 more jobs this year after suffering a dramatic decline in demand for digital cameras and commercial printing equipment.

As a result of the economic environment, the company plans to cut costs, including investment in growth areas, such as Image Sensor Solutions, its Kodak Gallery online service, Electrophotographic Printing in GCG, and Organic Light Emitting Diodes (OLED).

Kodak will pursue "alliances or other business model changes to reduce risk and enhance revenue and margins," the company said.

"Given this environment we are not going to be able to invest in the whole portfolio," Perez said at the meeting.

Shares were down 1 cent at $4.49 in early trading on the New York Stock Exchange.

(Reporting by Franklin Paul [1]; Editing by Derek Caney [2])

Links:
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[1] http://blogs.reuters.com/search/journalist.php?edition=us&n=franklin.paul&
[2] http://blogs.reuters.com/search/journalist.php?edition=us&n=derek.caney&

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