Eastman Kodak Tries Price Hikes, Good Luck (EK)

Eastman Kodak Co. (NYSE: EK) announced today that it will increase prices on certain consumable products by up to 20%.  You can guess the reason: soaring materials costs and the rise of petroleum.  Kodak’s implementation date is July 1, and this will be rolled out by groups and by geography over the next few weeks.

The company said the worldwide price increases should give it a break over some of the impacts of spiking costs in raw material.  As it is still a mega-consumer of silver costs and as it has energy intensive demands, it isn’t hard to fathom that this was coming down the pipe.

Unfortunately, Kodak already posted a first-quarter loss even outside of its restructuring charges.  The company thinks that it completed a multi-year restructuring process as it tries to shift its focus away from film and into digital.  Good luck on thinking that restructuring is done though.

The company managed to get these price hikes announced right before that solid wave of higher demand for physical film.  Oh wait, this is 2008 rather than 1988.  If the company can charge more and more for products that people are using less and less, then more power to them. 

Based upon the stock being down at $15.32 and with it having hit a 52-week low today, this price hike is probably going to be ignored and absorbed.  At least with the weak dollar Fuji is more expensive for the U.S. consumers in theory.

We have questioned what this company can do over and over to improve, even back when shares were at $25.00.  Good luck to Kodak, sounds like they’ll need it.

Jon C. Ogg
May 30, 2008