Hurt by Weak Film Sales, Kodak Trims Work Force

ROCHESTER (AP) — The Eastman Kodak Company said Thursday it was cutting 3,500 to 4,500 jobs, or 14 percent to 18 percent of its work force, as it posted a fourth-quarter loss of $137 million on plunging sales of both digital and film-based photography products. Its stock tumbled nearly 30 percent.

Kodak, a 129-year-old manufacturer, said it lost 51 cents a share in the fourth quarter. That compares with a year-ago profit of $215 million, or 75 cents a share.

Sales slumped 24 percent to $2.43 billion, from $3.22 billion a year ago. The company had a sharp slowdown in demand for digital cameras and inkjet printers, lower royalties from patents and unfavorable foreign exchange rates.

Revenue from digital products dropped 23 percent to $1.78 billion, and traditional film-based revenue fell 27 percent to $652 million.

Excluding revamping charges and one-time items the loss came to $21 million, or 8 cents a share. Analysts surveyed by Thomson Reuters expected, on average, a profit of 21 cents a share and sales of $2.81 billion.

“There was a point when Kodak had too many people. Now it’s going the other way,” said Ulysses Yannas, a broker for Buckman, Buckman & Reid in New York. “I don’t see that there’s any fat left, which says that when and if this thing turns around, you’re going to have a wild ride.”

The latest cuts that Kodak aims to complete in 2009 could trim its ranks to 19,900, a level not reached since the 1930s Depression era. Its payroll peaked at 145,300 in 1988.

“The second half of 2008 will go down in history as one of the most challenging periods we have seen in decades,” Kodak’s chief executive, Antonio M. Perez, said in a statement.

Kodak’s shares dropped $2.08, to close at $4.99 in Thursday trading.

In all of 2008, Kodak earned $339 million, or $1.20 a share, down 50 percent from $676 million, or $2.35 a share, in 2007. Sales fell 9 percent to $9.42 billion, from $10.3 billion.