Eastman Kodak Consolidating Business Units

Eastman Kodak Co. said Monday that it plans to consolidate its business units to streamline its operations, as the company seeks to boost its digital operations and improve profit.

The photography giant said it plans to simplify its organization by consolidating its seven business units into two groups: consumer business and commercial business.

The move comes as Kodak has been struggling to redefine itself in a digital age through major investments in digital products and Internet services.

“As the picture industry embraces the digital age, Kodak’s new structure will help the company grab a bigger share of a market that is far larger than traditional photography,” said Chief Executive Daniel Carp.

The company also said it would step up its focus on new business activities aimed at generating sales from Kodak’s research labs and external venture capital investments. The first new business will be called Kodak Display business unit and will focus on patented flat-panel display technology for consumer electronics.

Carp said the company would not incur any charges from the plan, which has been in the works for the last three months as the company seeks to concentrate on its two core businesses.

He said Kodak hoped to see financial results from the consolidation in 2001.

Last week, Kodak reported an 8% decline in its third-quarter profit and warned of a poor fourth quarter on slowing demand and the need to pare inventories. It also said it would seek to cut its selling, general administrative and manufacturing expenses.

Analysts warned at the time, however, that the company may have to go further, especially as the slower U.S. economy is stifling demand for film products.

Carp will head the consumer business group, and James Stoffel and Ted Lewis will head the commercial unit.

Kodak’s shares closed up $1.56 to $39.06 on the New York Stock Exchange.