Kodak shares dip 25% on drop in earnings projections
Shares in Eastman Kodak plunged 25% on Tuesday after the film giant lowered third-quarter earnings projections while its top numbers cruncher said execs don’t know exactly what has gone wrong.
“It’s generally a broad-based weakness,” chief financial officer Bob Brust said in a conference call with press and analysts. “We’re in a big derailment here, and we’re trying to figure out what it is.”
Kodak, which is based in Rochester, N.Y., and maintains a big motion-picture film division in Hollywood, blamed lower-than-expected monthly sales of film and digital products for the earnings revision. Per-share profit is projected at least 20¢ lower than the $1.56 to $1.66 range the company previously forecast.
Kodak shares closed down $14.63 at $44.38. The decline cut some $4.5 billion from the company’s market value.
The plummet drew comparisons with Wall Street’s broad market crash Oct. 19, 1987, when Kodak shares fell 30%. The stock already was battered headed into Tuesday, off 11% in a year that’s seen the broadly structured Standard & Poor’s 500 company index dip only 2%.
On Tuesday, the S&P 500 lost 0.8% and the blue-chip Dow Industrial Average shed 1.6%.
Representatives of Kodak’s Hollywood unit referred comment on the day’s stock activity to Rochester headquarters.
Analysts, who were busy downgrading their ratings on the stock throughout the day, suggested the company’s underlying operational difficulties could point to the need for a broad restructuring, including the possible splitting of Kodak into separate parts.
(Bloomberg News contributed to this report.)