Kodak to Focus on Printers, Digital Products
Sep 26, 2003
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Eastman Kodak Co. said it plans to respond to declines in its traditional film business by widening its range to ink-jet printers as it focuses on digital products.

The U.S. camera maker 's plans will put it in competition with entrenched makers of printers for the consumer market, including Hewlett-Packard, Canon, Seiko's Epson, Lexmark, and computer vendor Dell, which recently started selling relabeled printers manufactured by other companies.

At the same time, Kodak will not make any more significant investments in traditional consumer film, though it will make private-label film to sell under non-Kodak brand names internationally, the spokeswoman said, confirming a report in the Wall Street Journal.

Traditional film photography is under pressure due to growing popularity of digital still cameras. Consumers increasingly print these pictures at home on ink-jet printers.

Kodak has already expanded into digital still cameras and has more recently started putting emphasis on building its professional digital printing business in areas such as healthcare, in competition with Xerox Corp.

The plan could cost as much as U.S. $2 billion for moderate-size acquisitions over the next 3 years and more investment in the new growth areas.

Additionally, Kodak is likely to sell or close about $1 billion worth of an array of businesses, including the slide-carousel group, which could mean more job losses.

Kodak expects the strategy will increase revenue by 5 percent to six percent a year, though it will not achieve 6-percent growth this year.

The company said it will strive to reduce net debt to below the $2.0 billion it held at the end of 2002, adding it expects to be able to report annual earnings per share of $3.00 by 2006.

Some analysts anticipate the company will cut its dividend to use the cash for business operations. The current dividend yield is 6.5 percent. (Reuters)

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