Kodak Net Climbs 73% in Quarter, 63% for Year
Rochester, N.Y.-based Eastman Kodak Co. said Monday that increased sales of cameras, film and other products helped boost profits 73% in the fourth quarter from a year earlier, despite the continuing strength of the American dollar, which has hurt overseas sales.
The company said in a statement that profits rose to $204 million in the fourth quarter from $117 million in the fourth quarter of 1983.
It said revenue rose 7% to $2.75 billion in the three months ended last Dec. 31 from $2.57 billion a year earlier. For the full year, Kodak said its profits rose 63% in 1984 to $923 million from $565 million in 1983.
Revenue rose 4% in 1984 to $10.6 billion from $10.17 billion a year earlier, Kodak said, adding that higher volume, and not higher prices, was primarily responsible.
Earnings from operations in 1984 were $1.55 billion, a 51% increase from 1983.
Kodak Chairman Colby H. Chandler said the company continued to be hurt by the strength of the dollar, which pushed up the price of American products in foreign countries while helping make imported goods less expensive in the United States.
Despite the sharp increase from a year earlier, Kodak’s 1984 earnings were not as high as predicted by many Wall Street analysts.
Chandler and Kodak President Kay R. Whitmore predicted that the rate of earnings growth would slow in 1985 because of higher prices for raw materials, higher spending on research and development and continued strengthening of the dollar.
Tandon Cites Write-Down for $15.4-Million Loss
Disk-drive maker Tandon Corp., seeking to shift away from its traditional type of microcomputer memory, said it has taken a $25-million write-down on inventory.
The action resulted in a first-quarter loss of $15.4 million on revenue of $90.7 million, compared to the year-earlier quarter, when it earned $9.3 million on revenue of $93.1 million.
In fiscal 1984 ended last Sept. 28, the company earned $29.4 million.
The Chatsworth-based company is the largest U.S.-based producer of disk drives for the microcomputer industry.
The write-down comes just one month after International Business Machines Corp. canceled a contract for floppy disk drives that accounted for 58% of Tandon’s sales last year. The company has said that the loss of that contract could adversely affect earnings in the second and third quarters.
IBM has said it will give Tandon a new contract for a different type of computer memory, and negotiations on that pact are still under way, said Ranjit Sitlani, Tandon’s vice president-planning.
Sitlani said there is “a rapid and broad-based industry trend” to shift to half-height 5-inch floppy disk drives instead of full-height units. As a result, Sitlani said, the company expect that it will have to discount its inventory of traditional full-height disk drives in order to sell them.
Shipments of the newer products have begun, but their volume isn’t expected to be large enough to show a major impact on earnings until later this year, the company said.
People Express Posts Sharply Lower Profits
People Express Airlines Inc. reported a decline in 1984 profit to $1.6 million from $10.4 million the year before. The carrier said the cost of adding 10 new cities to its service was responsible.
The losses do not mean that People Express--considered a prototype of the new unregulated airline--expanded too quickly, said officials at the 4-year-old, no-frills carrier.
An analyst, however, said the losses are the price to be paid for going up against the more established carriers.
For the quarter ended last Dec. 31, People Express had a net loss of $8.9 million, compared to net income of $1.3 million in the year-ago period.
The airline’s “disappointing results were due to the cumulative effects of the investments in 10 new cities since June, 1984,” said Donald C. Burr, People Express chairman and chief executive.
