ROCHESTER, New York (AP) — Eastman Kodak Co. said Tuesday that it has realigned and simplified its business structure in an effort to cut costs, create shareholder value and accelerate its long-drawn-out digital transformation. Its depressed shares shot up 30 per cent in morning trading.
The 132-year-old photography icon has been pummelled by consumers’ switch to digital. Its fortunes deteriorated further last year, and it said in November that it could run out of cash in a year if it couldn’t sell a trove of 1,100 digital-imaging patents.
Since the start of the year, Kodak said it now has two business units instead of three. The commercial and consumer segments will report to a new chief operating office led by President and COO Philip Faraci and Laura Quatela, who was also recently named to serve alongside him in those executive posts.
Previously, Kodak’s business segments were divided into its traditional film and photo paper products, consumer digital imaging and graphic communications, which included printing equipment.
Since 2005, Kodak has poured hundreds of millions of dollars into new lines of inkjet printers that are finally on the verge of turning a profit. Home photo printers, high-speed commercial inkjet presses, workflow software and packaging are viewed as Kodak’s new core.
Kodak is hoping the printer, software and packaging businesses will more than double in size by 2013 and account by then for 25 per cent of its revenue, or nearly $2 billion.
“As we complete Kodak’s transformation to a digital company, our future markets will be very different from our past, and we need to organise ourselves in keeping with that evolution,” said Chief Executive Antonio Perez.
No business segments are being cut, just reorganized. Kodak is not announcing job cuts as part of the move, said spokesman Christopher Veronda. “However, we will continue to look for opportunities to streamline operations and properly position the company’s portfolio,” he said.
In the dozen years before 2011, Kodak had lost more than 95 per cent of its value as it was pummelled by foreign competition and then shaken to its core by a digital revolution. Shares fell another 80 per cent in 2011, having started the year at about $3. In November, it reported its ninth quarterly loss in three years and said its cash reserves had fallen 10 per cent in three months. It posted its last annual profit in 2007.
Kodak has been reported to be preparing for a bankruptcy reorganization filing if it can’t sell the digital-imaging patents, which analysts estimate could fetch as much as $2 billion to $3 billion. No buyers have emerged since the company started shopping them around in July.
The company’s stock rose 12 cents to 52 cents Tuesday. The New York Stock Exchange warned Kodak earlier this month that it would drop the stock if its price remained below $1 per share for the next six months.
Kodak reports its fourth-quarter results on Jan. 26.
AP Technology Writer Barbara Ortutay contributed to this report from New York.