Kodak Withdraws Second-Half and Full-Year 2008 Guidance
Press release from the issuing company
ROCHESTER, N.Y. - December 10, 2008 - Eastman Kodak Company today announced that it has withdrawn its second-half and full-year 2008 guidance for revenue growth, digital revenue growth, earnings from continuing operations, and cash generation because of the deepening global recession and changes in the value of the U.S. dollar.
In recent weeks, and subsequent to providing its forecast on October 30, 2008, the company has seen the dramatic slowdown in consumer spending continue and worsen. Additionally, businesses are reducing capital expenditures, and as credit markets remain very tight, commercial customers are finding it increasingly difficult to secure financing for new equipment purchases. Real estate markets also remain weak, making sales of the company's surplus assets more difficult. Dramatic changes in the value of the U.S. dollar in countries where the company sources and sells its products are also reducing revenue and earnings.
As a result, Kodak now expects 2008 second-half and full-year revenue growth, digital revenue growth, earnings from continuing operations, and cash generation to be below its October forecast. The company did not provide a revised forecast and will update investors on business performance when it announces its fourth-quarter and full-year 2008 results on January 29, 2009.
As previously announced, Kodak is taking a number of specific actions to address the global economic challenges impacting all of its businesses. These actions, which the company has already begun, include more tightly focusing its portfolio of investments, intensifying its emphasis on generating cash, and further streamlining its cost structure. Additionally, today the company announced that where permissible by law its executives would not receive a salary increase in 2009 and that it would temporarily suspend for 2009 the company's U.S. 401(k) match. Based upon the current outlook, company management also does not expect a payout in 2009 for the executive Leadership Stock program that is based on 2008 performance.
"There is an unprecedented amount of uncertainty surrounding the economic environment and most signs indicate that we may be facing a prolonged global recession," said Antonio M. Perez, Kodak Chairman and Chief Executive Officer. "Yet, Kodak is financially strong and we are well positioned to manage through this economic downturn. We have a solid cash position, a modest debt balance, and, despite current lower overall demand, we continue to maintain our market share in key businesses. That reinforces our confidence in our overall strategy. We will continue to take prudent actions necessary to ensure that Kodak is well positioned to take full advantage of the economic recovery when it comes."
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