Tough times ahead for Kodak…one the most famous names in photography, will be forced to break up as a result of a collapse in demand for its digital cameras and printers.
Kodak gave warning on Wednesday that revenues and profits for 2008 would fall well below Wall Street expectations as American consumers stopped spending on all but essentials, such as food and petrol. It also said that it had been forced to suspend some of its executive retirement contributions and that all boardroom pay would be frozen.
Shares in the American group, which are traded in New York, sank by 12 per cent as traders considered the gloomy prospects for the company, which had already reduced its revenue and profit forecasts in October. The shares, which traded at $30 at the beginning of the year, were yesterday valued at $6.40 each.
Shannon Cross, an analyst at Cross Research, told clients: “We think Kodak will need to make some hard decisions regarding its consumer inkjet business, Stream and Nexpress, as investment required to support these initiatives may be too high given deteriorating end markets.”
