Kodak may sell imaging business
Eastman Kodak Co., undergoing a rough transition to digital photography, said Thursday it was considering the sale of its fabled health-imaging business after reporting a $298 million loss in the first quarter — its sixth straight quarterly loss.
Created a year after the discovery of X-ray film in 1895, the unit accounts for nearly one-fifth of Kodak’s overall sales but its operating profit plunged 21 percent last year as margins tightened. A sale would wipe out most or all of Kodak’s $2.6 billion in debt, analysts noted.
“To some extent it is a survival tactic,” said Shannon Cross of Cross Research in Short Hills, N.J., who thinks the business might fetch $1.5 billion to $2 billion. “Nothing’s imminent, but they need to improve their capital structure.”
“It’s a fast way of restoring their credit rating,” echoed Ulysses Yannas, a broker with Buckman, Buckman & Reid in New York who thinks the unit “can bring at least $4 billion.”
Largely because of restructuring costs, Kodak lost the equivalent of $1.04 a share in the January-March quarter, compared with a loss of $146 million, or 51 cents a share, a year ago.
Kodak is looking at “strategic alternatives” for its Health Group that include a partnership, an outright sale and other options.
“We will explore them all and selling will be one of them — but it’s not the only one,” Chief Executive Antonio Perez said in a conference call with analysts.
•Goodyear Tire & Rubber Co. said Thursday its first-quarter profit rose 8.8 percent on one-time gains and a slight increase in revenue.
Goodyear earned $74 million, or 37 cents per share, for the three months ended March 31 compared to $68 million, or 35 cents per share, for the same quarter in 2005. Revenue grew to $4.86 billion from $4.77 billion in the year-ago period.
The 2006 quarter’s results included a number of gains totaling $55 million, or 26 cents per share, related to settlements with suppliers, a pension plan change in Latin America and the settlement of legal matters.
•Tyco International Ltd. on Thursday reported fiscal second-quarter earnings shot up fivefold from year-ago results that included a hefty charge. The manufacturing conglomerate also lowered its full-year forecast.
The company, whose best-known business is ADT Security Services, a maker of home alarm systems, said quarterly profit totaled $1.02 billion, or 49 cents per share, up from $192 million, or 10 cents per share, a year earlier. Revenue totaled $10.21 billion, up slightly from $9.99 billion a year ago.