ts name was once synonymous with home photography. Now, Eastman Kodak is struggling just to stay in the picture.
The American icon, which coined the once-ubiquitous "it's a Kodak moment" catch phrase, has labored for years to convince Wall Street it can turn a profit as it shifts toward digital technology and away from its ailing film business.
But after incurring restructuring charges for more than a decade, missing financial targets and trading at a low share price, investors' patience has worn thin. It last made an annual profit in 2007.
"Kodak's transition to digital is the never-ending story," said Gregg Abella, co-principal of Investment Partners Group, which owns more than 200,000 shares. "I'm blown away that there hasn't been a shareholder revolt."
When asked to respond, a Kodak spokesman referred to Chief Executive Antonio Perez's remarks at a meeting with investors on February 3 at the New York Stock Exchange. Kodak "will complete the transformation of this company to a sustainable and profitable digital company by 2012," Perez said.
"The closer we get to that date, the stronger we feel that we are tracking into that," he added.
At least one participant was unsatisfied with that response. When time had run out for investors to put questions to management, he demanded that Chief Executive Antonio Perez stay on stage to field more questions.
When Perez answered that management had to go to meet with other shareholders, the participant replied, "I'm a shareholder! You guys have no credibility. Zero."
Kodak stock, which hovered in the $90 range in 1997, currently trades at $3.65, a 40 percent drop over the past 12 months after it missed its own targets. The company declined to comment on its share price.
Investors like Abella have tired of Kodak's promises.
"Every year, the company says 'We're going to get there, we're going to be profitable' and every year, it seems to be two years out. No shareholder has an infinite amount of patience," Abella said.
Analysts like Cross Research's Shannon Cross said investors are alarmed by the amount of cash the company is spending and its share price. The company is projecting to lose about $300 million in cash this year, excluding sales proceeds from certain assets, she estimated, and much of it will go to investments in its inkjet printer business.
"Investors are frustrated with Kodak because management hasn't been able to meet the targets that they set and the cash burn rate has been high and the stock has declined significantly," Cross said.
PATENTS IN FOCUS
In 2003, Kodak embarked on a pricey restructuring plan intended to transform it into a company that makes products for digital photography and printers. It suspended its dividend and slashed more than 70 percent of its employee base to 18,800.
ليست هناك تعليقات:
إرسال تعليق
ملحوظة: يمكن لأعضاء المدونة فقط إرسال تعليق.