Kodak May Announce It’s About to Shed Drug Unit : Restructuring: It would be the first major move under leadership of George Fisher. Rumor boosts stock $3.25.

Eastman Kodak Co. fueled speculation late Monday that it will sell all or parts of its Sterling Winthrop drug group by saying it would make a major announcement early today.

Kodak gave no details and declined to elaborate beyond a two-sentence release alerting Wall Street to a “significant announcement” this morning.

Analysts said Sterling could be a candidate for sale, especially after a sharp rise in drug stocks propelled by news Monday that Roche Holding Ltd. bid $5.3 billion for Syntex Corp.

But analysts stressed that they were merely speculating, and the announcement may be unrelated to Sterling, a maker of prescription and other drugs acquired by Kodak in 1988.

The last time Kodak signaled a major corporate development in this fashion was when George Fisher was named chairman and chief executive in October.

Speculation about Sterling helped lift Kodak’s shares $3.25 to close at $44.75 in heavy New York Stock Exchange trading of 2.43 million shares.

Drug companies, faced with a toughening U.S. market and the likelihood of heavier cost controls coming from Washington, are looking for partners. And Kodak spun off its slow-growing chemicals business last year.

Fisher was scheduled to meet later today with Wall Street portfolio managers and journalists in New York, and May 11 he conducts his first Kodak annual meeting at the company’s headquarters in Rochester, N.Y.

The meetings with analysts and stockholders mark Fisher’s first major appearances before shareholders since his appointment in October, when he quit as chairman of celebrated high-tech innovator Motorola Inc.

“We need to know, ‘Where’s the beef?’ ” said analyst Brenda Landry of Morgan Stanley. “He’s got to tell us how he’s going to hitch a ride on the electronic superhighway.”

The first outsider to head Kodak, Fisher has spent much of the last months studying the world’s largest maker of photographic products and meeting its employees.

He has caused internal stirs by eating lunch in Kodak’s cafeteria and pushing a shopping cart around a local Kmart store.

Since succeeding beleaguered Kay Whitmore in December, Fisher has hired a new chief financial officer, shuffled Kodak’s electronic imaging businesses into one group and overseen a flat first-quarter earnings report.

Kodak, long used to getting premium prices for its black-and-yellow boxes of film, also announced under Fisher its first-ever discounted line of photographic film called Funtime.

“We expect this to set off a price war,” Prudential Securities analyst Alex Henderson said. “It’s dangerous to compete for market share in a business with high gross margins.”

Big shareholders--the same ones who demanded Whitmore’s ouster--want the company to swallow the bitter pill and realize its decades of high growth are over.

Also, they want cost savings, job cuts and maximum profits.

“They need to take out 20,000 to 30,000 jobs,” Henderson said.

But Fisher has repeatedly said he sees some Kodak operations as growth businesses and that he may not need to cut all 10,000 jobs targeted in a restructuring launched by Whitmore.

He sees opportunities for Kodak in emerging digital technologies and electronic information systems.

“Fisher’s a growth guy. He’s a builder, not an ice man,” Henderson said.

“I’d be very surprised if he did anything big,” said portfolio manager Ernest Widmann of Widmann, Siff & Co.

Analyst Gary Schneider at Bear Stearns & Co. said he expects Fisher to take modest steps aimed at increasing Kodak’s cash flow and cutting its debt, but he doubts the company will launch another restructuring.

“If he concentrates 100% on vision and not on micromanagement matters, then I’d be disappointed,” Schneider said.