Eastman Kodak Proves Silver Can Rust (EK)
Eastman Kodak Co. (NYSE: EK) has been trying to turn a corner for quite some time. This morning the company turned a corner, and walked right into Thor’s Hammer. The film maker has withdrawn all guidance for the second half of the year and for all of 2008.
The company is blaming the economic downturn for its problems. The company has seen a severe slowdown inconsumer spending and businesses capital spending. It noted that the credit crunch made it more difficultor not possible for commercial customers to secure financing.
The company is taking further measures as well. Kodak executives willnot get raises in 2009 and 401(K) matches are being suspended.
Kodak has supposedly completed its transition from a film and film processing company into a digital-imaging businesswith products in software, printers and digital cameras. It stillseems as though it is having more than hard times navigating the storm.
We outlined this and much more as why we brought Antonio Perez back onour LIST OF CEO’s TO GO for 2009. This is probably the last bigrelease of this sort before shareholders start banding together to getsome new blood in the company. The company wasn’t a great bullishstory when the economy was good. So why should the same leader be incharge when times are tough?
Shares are down over 15% pre-market at $6.10 and that is going to be a new 52-week low if it holds. Its 52-week trading range was $6.15 to $23.88.
Jon C. Ogg
December 10, 2008