Kodak Adds More Job Cuts to Restructuring
Eastman Kodak said it expected to complete a three-year restructuring program by the end of 2007, including additional job cuts, that will help it sustain profitability.
Kodak said ahead of an investors day in New York that it aimed for gross profit margins of 28% to 29%, with earnings from operations at 8% to 9% of revenue in 2009.
The camera and photography company expects to make restructuring payments of $575 million to $625 million in 2007, raising the total cost of an overhaul first announced in January 2004.
Kodak expects total restructuring costs of $3.6 billion to $3.8 billion from the program, with job cuts of 28,000 to 30,000 positions. As of the fourth quarter, Kodak had eliminated 23,400 jobs under the plan.
Kodak last updated its restructuring plan in August, when it said it expected to cut 25,000 to 27,000 jobs and take total charges of $3 billion to $3.4 billion.
Kodak aims to complete a tough and expensive shift away from its traditional film market, where sales are declining, to digital products and services. The company introduced earlier this week a long-awaited line of inkjet printers and replacement cartridges.
On Thursday, the company said it expected digital earnings from operations of $200 million to $300 million in 2007 on digital revenue growth of 3% to 5%.
Fueled by patent license revenue, the company said last week that it turned a small profit in the 2006 fourth quarter. Its net loss for the full year was $754 million, significantly narrower than its loss of $1.35 billion in 2005.
Wall Street analysts have found it difficult to measure Kodak's overall health due to the constant restructuring over the past three years. While some units have grown and added workers, others are cutting operations and jobs.