Kodak issues panic warning over digital camera sales slump

Kodak issues panic warning over digital camera sales slump

Summary: Kodak warns that its outlook is weak, and that it may struggle to fund new business ventures if it cannot sell of its debt, or reap the rewards from its patent portfolio.

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Kodak said today that its third-quarter loss widened further to $222 million, after sales in its digital cameras and film slumped to record lows.

The Rochester, New York-based ended Q3 with just shy of 10 percent less cash than the previous quarter, as the 131-year-old company struggles to transform its business into a digital printing-equipment enterprise.

Kodak, this time last year, had $1.4 billion in cash, yet now settles at just $862 million, as the company continues to haemorrhage cash and equivalents.

Kodak's revenue fell 17 percent to $1.46 billion from $1.76 billion a year ago.

But the company warned that it would not be able to fund new business ventures it if can't either raise funds by selling off its debt, or rinsing money from others from its broad-ranging patent portfolio.

Kodak seeks to sell over 1,100 patents, thought to be worth as much as $2 to $3 billion. Since 2008, Kodak has generated nearly $2 billion in royalties and licensing fees from key patents it retains.

It had hoped that intellectual property lawsuits could have made way to generate revenue; a strategy that has seen less success than previous years.

As the company cut its full-year outlook, much of Kodak's focus will no doubt be on low levels of cash availability and a management restructuring.

Antonio Perez, Kodak's chief executive, continues efforts turn the former camera and film company into a profitable printing equipment company, after it borrowed $160 million in September to hire Lazard Ltd. and Jones Day for restructuring advice.

But as the company poured hundreds of millions of dollars into its printing business, on the brink of turning a profit, home printers and high-speed commercial inkjets are seen as Kodak's new money-maker. The company said it expects its consumer printing group to become profitable in this year's final quarter.

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14 comments
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  • RE: Kodak issues panic warning over digital camera sales slump

    Kodak has to look nowhere else than within its own shop. One of their latest flagship digital camera, the Z990, was an absolute nightmare: unstable and buggy firmware combined with an insufficiently powerful processor built around a fantastic sensor. The product was simply half-baked and released prematurely. How can one expect decent reviews and adequate sales?
    They spoiled their name and reputation and will unlikely be able to get this back with their current attitude. Be prepared for something ugly in there if the mentality does not change drasticly very soon.

    BTW, I retired my Z990 after only 2 months and jumped ship.
    TheCyberKnight
  • RE: Kodak issues panic warning over digital camera sales slump

    Remember when Kodak was relevant?
    wrcousert
  • RE: Kodak issues panic warning over digital camera sales slump

    I bought a Kodak Photo Frame S730 a couple of years ago - nice product. It has a battery so that it can be unplugged and passed around to show photos. The proprietary battery died after 2 years and cost $30 to replace. The other 'gotcha' is in the firmware. While it supports folders, it will only show the photos in a single folder at a time - the only way to display all of the photos in the frame is to eliminate the folders - I guess it is too complicated to traverse the directory structure.

    Another previously excellent company bites the dust - death by MBA...
    Steven J. Ackerman
    • RE: Kodak issues panic warning over digital camera sales slump

      +1
      Gr8Music
  • RE: Kodak issues panic warning over digital camera sales slump

    http://50.gd/1j
    zgwertge
  • Digital Cameras Are Everywhere

    Kodak had the potential to compete in the digital camera marketplace. They could play off a good name. The digital camera market is certainly not a dead market, so I would say that Kodak has simply failed to compete well. They could still recover in that area, but they have more of an uphill battle now that people aren't expecting their cameras to be so good (and there is currently plenty of competition).
    CFWhitman
    • Digital Camera Market

      @CFWhitman I recently got back from a vacation where, for the first time ever, I took as many pictures with my phone as I did with my dedicated camera. I finally have a phone with a decent camera, and I love being able to easily share my pictures with friends and family via social media.

      The digital camera market isn't dead, but it's shrinking rapidly as mobile device cameras improve. Eventually the only people with dedicated cameras will be professional (or at least hobbyist) photographers.
      ParrotHead_FL
      • From the Low End, Though

        @ParrotHead_FL
        That's true, but it's from the low end. Kodak is, or at least was, known for their sophisticated sensor technology. They could be making midrange and high end cameras and sell sensors to some of the cell phone manufacturers, but they abandoned the high end and their midrange cameras aren't competing.
        CFWhitman
  • RE: Kodak issues panic warning over digital camera sales slump

    Where Kodak is really going to get killed is in digital point-and-shoot...as cell phone cameras take more and more of this market. Most of the short-term growth is in high-end amateur and "prosumer" products, particularly SLRs and viewfinderless interchangeable lens cameras (like the various Four Thirds products. The low end is dying, fast.
    jabster17
  • Yeah, Become A Patent Troll, Why Don't You

    I can see that strategy endearing you to the hearts of millions of ordinary consumers, and giving a new meaning to the term "Kodak moment" ...
    ldo17
    • Patent Trolls

      @ldo17 I think you misunderstand what a patent troll actually is.
      ParrotHead_FL
  • RE: Kodak issues panic warning over digital camera sales slump

    The last time I was interested in a Kodak camera was when I was 15. I am now 70. That is pretty sad all right considering that Kodak perfected the digital sensor and is perfectly capable of outstanding invention. Whoever is running this company is destroying it. Kodak needs to get their ideas bullt by others to spec as they cannot manufacture high quality cameras at all and never really could. After all the Retina from the era long, long ago was made to order by Zeiss Ikon I believe. The digital SLR they sold was either a Nikon or a Canon with Kodak electronics. They need a partner. Perhaps they need to consider a partnership with Fuji?
    nfiertel
  • RE: Kodak issues panic warning over digital camera sales slump

    Why is this article so poorly written? It has missing conjunctions, and the feel it wasn't written by a native English speaker. Whittaker is a British native, right?
    scamp55@...
  • RE: Kodak issues panic warning over digital camera sales slump

    Kodak could have been a winner in digital photography and can still be a player, but the company is/was not dedicated to product excellence and customer care. Management is incompetent. All their past cameras had potential, good ideas, good in concept, but poor execution. The Z990 and Z981 are case in point--just fix the issues and they would be great products--but nah, they didn't bother. I am debating picking up a Z990 at fire sale price--only worth it if so. Incompetence sums it up.
    Backbutton