The Endless Unwinding of Eastman Kodak (EK)

Eastman Kodak Co. (NYSE: EK) is doomed.  It has already been rumored in prior weeks that the company was going to restructure.  Now its earnings could make a rumor a self-fulfilling prophecy if repeated a couple more times.  To make matters worse, it appears to need to raise capital.

The company lost $222 million, which came to -$0.83 EPS.  Revenue was down 17% to $1.46 billion.  On top of losses, Kodak now sees 2011 revenue down in a range of $6.3 to $6.4 billion versus its prior forecast of $6.4 to $6.7 billion.

Eastman Kodak’s cash reserves were down to $862 million from $957 million in the summer report.  The imaging company gave guidance for te cash balance to be $1.3 to $1.4 billion.  That figure is said to exclude any intellectual-property pacts.  Eastman Kodak had previously projected $1.6 to $1.7 billion as the year-end target.

What is happening is a capital raise, and this could go very well or very poorly for the company.  The sum appears to be $500 million.  Things are so low there now that Eastman Kodak has a market value of only $322 million.

JON C. OGG