Kodak...

[P3D Eric Goldstein <egoldste@xxxxxx>]

Tuesday October 14 1:46 PM EDT 

Kodak Posts 43 Pct Decline in 3rd Qtr Income

ROCHESTER, N.Y. (Reuters) - Eastman Kodak Co. said Tuesday it earned
$232 million in the third quarter, down 43 percent from a year earlier,
as the struggling film maker's sales fell 9 percent. 

Kodak said it earned 71 cents a share on sales of $3.79 billion. A year
earlier, Kodak earned $410 million, or $1.22 a share, on sales of $4.18
billion. 

The company's earnings matched Wall Street expectations, according to an
estimate of 11 analysts polled by First Call. 

Kodak also said it planned an unspecified number of job cuts this year
on top of the previously announced 20 percent reduction of the company's
management ranks. 

"Additional actions will follow this year to reduce employment in
general and administrative support areas throughout the company," Kodak
said. 

The company has said it will disclose further information about reducing
costs and increasing sales in November. 

Kodak said a strong dollar slashed third-quarter earnings by 20 cents a
share. The company also took a one-time charge of $46 million, to pay
for litigation involving the sale of micrographics and copier parts. 

Kodak, which gave a profit warning on September 15, has been struggling
abroad with a strong dollar, while its U.S. film sales have been slack
as its main rival, Fuji Photo Film Co. of Japan, is offering some of its
film at prices 25 percent to 35 percent below Kodak film prices. 

Operating income at its consumer photo business fell 21 percent to $325
million from $411 million. The unit's sales were flat at $2.08 billion. 

The division posted a five-percent gain in U.S. sales, to $945 million
from $898 million. But its sales outside the United States declined by
five percent to $1.13 billion from $1.18 billion. 

The company's professional photo division saw the largest drop in
operating income, down 50 percent to $109 million from $216 million a
year earlier. The division's sales dropped 18 percent to $1.71 billion
from $2.08 billion. 

"Our financial results continue to be seriously impacted by the adverse
effects of the strong dollar, reduced earnings in our core consumer
business, driven by an intensifying competitive environment, and losses
in digital," Kodak Chief Executive George Fisher said in a statement. 

"As a consequence, we are making significant changes in the company's
operations to compete effectively in this environment," he said. "We
will accelerate efforts to reduce our cost structure, while sustaining
our investments in those growth initiatives important to our future." 

Kodak already has started to cut U.S. film prices, offering discounts to
retailers. However, it insisted last month that the cuts were temporary. 

Analysts have said Kodak must cut its film prices or see its U.S. market
share, which has dropped to 70 percent from 75 percent last year,
further erode.


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