Kodak Moment: Profit Up 17% in 4th Quarter
Eastman Kodak Co. said Monday that its fourth-quarter profit rose a better-than-expected 17% as the world’s biggest photography company benefited from deep cost cuts and strong film sales worldwide.
Profit from operations rose to $403 million, or $1.27 a share, from $343 million, or $1.05, a year ago, exceeding the $1.24-a-share average estimate of analysts polled by First Call/Thomson Financial. Estimates ranged from $1.20 to $1.31.
Revenue rose 6.6% to $3.8 billion, the fourth straight quarterly increase. Expenses were down 14%.
Chairman George Fisher’s 1997 plan to slash Kodak’s payroll by about 20% has driven profit growth amid competition with Fuji Photo Film Co. Under new Chief Executive Daniel Carp, Kodak said it expects rising sales to pace its profit growth in the next several years, including an increase of 6% to 7% in 2000 from 1999’s $14.1 billion. Analysts had forecast a 5% sales rise in 2000.
The company also said it expects full-year 2000 profit to be in line with the average First Call estimate of $5.64 a share.
Losses in Kodak’s digital products business narrowed as sales surged 36%. Kodak didn’t say when its digital business would be profitable.
For all of 1999, Kodak earned $1.392 billion, or $4.33 a share, up from $1.39 billion, or $4.24 a share, in 1998, as sales grew 5% to $14.09 billion.
The company cut costs by $520 million in 1999 and $730 million in 1998--$50 million more than its two-year target of $1.2 billion. That translated into about 20,000 layoffs out of a worldwide payroll of 100,500--the deepest cutbacks in Kodak’s 119-year history.
Kodak shares rose $1.31 to close at $62.06 on the New York Stock Exchange.
The stock had fallen more than 30% since February 1997, when it traded at $94.25 and just before a price-cutting struggle with Fuji began to reduce film revenue.
At a Glance
Other earnings, excluding one-time gains or charges unless noted, include:
TECHNOLOGY:
* Compuware Corp. said its fiscal third-quarter net income grew 40% to $133.4 million, or 35 cents a share, on higher fees from professional services and licenses. The results, which exclude amortization and research and development costs, beat estimates by 2 cents. Revenue jumped 47% to $637 million. The results were announced after regular trading hours.
* Network Associates Inc., a maker of security software, said its fourth-quarter earnings doubled to $30.07 million, or 20 cents a share, excluding merger costs, 3 cents better than analysts expected. Revenue fell 20% to $218.1 million. During the quarter, the company shifted from selling complex packages of security and network management software to individual products. The company released its results after the close of regular U.S. trading.
* Silicon Graphics Inc. said its fiscal second-quarter loss narrowed to $1 million, or 1 cent a share, from $25 million, or 14 cents, a year earlier and said it expects to post a profit in the fiscal fourth quarter. The loss was in line with analysts’ expectations. The maker of computer workstations said sales fell 5.3% to $648.2 million.
* Texas Instruments Inc.’s fourth-quarter profit jumped 65% to $564 million, or 51 cents, exceeding analysts’ estimates of 47 cents, as the company that provides chips for two-thirds of the world’s cellular telephones benefited from rising demand for wireless equipment. The results exclude amortization and acquisition-related expenses. The company, which reported the results after the regular markets closed, said sales climbed 26% to $2.55 billion. Texas Instruments shares were up 8 cents at 110.88 in after-hours trading on the New York Stock Exchange.
OTHER INDUSTRIES:
* American Express Co. reported a 14% rise in fourth-quarter profit to $606 million, or $1.33 a share, matching analysts’ forecasts, on higher credit and charge card revenue and mutual fund fees. American Express also said it will split its stock 3 for 1, effective May 10, its first split since 1987. Revenue rose 15% to $5.23 billion in the latest quarter, as American Express benefited from a strong economy. The company’s issuance of credit cards jumped in the quarter, partly because of its new blue card, but margins declined. Faced with a backlog of applicants for the blue card, the company has been writing to customers apologizing for delays of up to several months in processing orders.
* El Paso Energy Corp., a pipeline operator that is buying Coastal Corp. for $16 billion, said its fourth-quarter profit from operations rose 49% to $112 million, or 48 cents a share, 2 cents better than analysts expected, as new power plants and higher oil prices boosted returns. Revenue rose 19% to $2.4 billion.
* Whirlpool Corp. said fourth-quarter profit rose 36% to $113 million, or $1.51 a share, exceeding analysts’ estimates of $1.48. Revenue slipped 2% to $2.69 billion, hurt by currency fluctuations. Sales grew 8% in North America and jumped 42% in Europe.
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--Associated Press was used in compiling this report
