After nearly six years at the helm of Eastman Kodak Co., Antonio Perez is reminding Wall Street that the photography pioneer is still a year away from turning itself back into a reliably profitable company.
“I know the market is impatient, I understand, but we always knew that this was a journey that was going to take until 2012,” the chief executive told The Associated Press before Kodak’s annual investor meeting in New York on Thursday. “And we are going to be successful as we promised in 2012.”
A week after Kodak posted its third straight yearly loss, Perez is keenly aware of growing skepticism over the 130-year-old company’s ability to complete its mammoth digital turnaround. But he adamantly rejects speculation that Kodak may be headed for bankruptcy court or a takeover.
“Absolutely not,” Perez shot back in an interview. “I understand that some people say that. Why they say it, I don’t want to make a judgment. There is no reason in the world to believe that we will be in that (position) in any scenario that we can imagine.”
This year, however, Kodak will likely wade once more through red ink.
It projects operational earnings will range from breakeven to a loss of $200 million, while losses from continuing operations will range from $100 million to $300 million.
And despite a 40-plus percent jump in revenue from four dynamic businesses led by inkjet printers, Kodak said it expects overall sales will drop by as much as 11 percent to between $6.4 billion and $6.7 billion this year, from $7.2 billion in 2010.
The chief reasons: Kodak’s traditional film business is rapidly shrinking and it is shifting to pricier, higher-margin cameras as pricing pressures squeeze its high-volume but low-end, point-and-shoot camera business.
Analysts surveyed by FactSet, whose estimates typically exclude one-time items, are looking on average for Kodak to lose 47 cents a share this year on revenue of almost $7 billion.
Deutsche Bank analyst Chris Whitmore complained that Kodak keeps pushing back the timetable on a long-drawn-out overhaul strategy that remains perilous.
“It’s always ‘manana, manana, manana,’” he said. “Yeah, they have some pockets that are going to generate good growth. We’ll see how they progress over the next couple of years and whether they’re substantial enough to offset some real fundamental challenges in the other 85-90 percent of the company.”
Through 2013, Kodak forecasts that revenue from four growth businesses — workflow software, packaging, home inkjet printers and high-speed inkjet presses — will more than double to nearly $2 billion. Their share of sales will rise from about 10 percent to 25 percent.
After a $3.4 billion digital overhaul from 2004 to 2007, Kodak’s momentum was stalled by the recession. Since 2002, it has chopped its work force from 70,000 to 18,800, its smallest payroll since the 1930s.
Kodak is banking on leaner costs and generating cash from film and digital-imaging patents to bridge the gap to 2012 when “this company will become a sustainable, profitable digital company,” Perez said.
A native of Spain, the 65-year-old Perez ran Hewlett-Packard Co.’s digital printing operations before moving to Kodak in 2003 and succeeding Dan Carp as CEO in 2005.
Kodak predicts home printers will turn their first profit later this year, with the business generating a full-year profit in 2012. Commercial printers will turn profitable in 2012 and produce a full-year profit in 2013, it said.
Kodak said it expects to continue to generate an average of $250 million to $350 million annually through 2013 from licensing its digital inventions. Over the last three years, it outpaced that figure, booking $1.9 billion in revenue.
While the company that put film cameras into most homes in America was slow to pick up on digital photography, it has since been rewarded for its digital expertise.
Kodak has amassed more than 1,000 digital-imaging patents, and almost all of today’s digital cameras rely on that technology. It scored major patent-litigation triumphs against South Korea’s Samsung Electronics Co. and LG Electronics Inc. last winter over an image-preview patent it obtained in 2001.
But in a sharp setback, the U.S. International Trade Commission said in a preliminary ruling in January that Apple Inc.’s iPhones and Research in Motion’s BlackBerry camera phones do not violate the same Kodak patent. Kodak still expects to prevail when the agency, which oversees U.S. trade disputes, issues its final decision in May.
Kodak shares fell 8 cents, or 2.2 percent, to $3.58 in late trading.