Eastman Kodak

Confidence Building at Kodak

Eastman Kodak (EK) will be hosting its annual meeting with the investment community on Thursday in New York. It would be a good idea to listen to or attend this meeting. It appears the turnaround is very much underway.

• Net cash generation of $592 million versus an estimate of $400 million to $600 million, hitting the higher end of the estimate
• Digital earnings grew five-fold, albeit only hitting the lower end of guidance
• Intellectual property development doing well, as it makes progress with its CMOS business and generates profits from its other IP businesses

The negative side of Eastman Kodak's earnings release was slower digital growth than expected as management decided to focus on profitability versus chasing the lower end of the digital camera market.

Kodak ended the year with $1.5 billion of cash on the balance sheet. And will receive $2.35 billion in cash from the health care business disposition.

Antonio Perez, although focused on his task, has demonstrated some nervousness with the investment community as his turnaround strategy hit bumps in the road. However, it appears the biggest bumps have been hit and smoother roads are ahead. Investors need to revisit Eastman Kodak. It is no longer an asset intensive, slow moving company.

Feburary 6, 2007