Will Kodak 'Print' Money?

Eastman Kodak's (EK) press release today that the company is making "progress" in its digital strategy leaves out one key point: In recent quarters its digital sales have been slipping from the year earlier.

The real story at Kodak is its push into printers, which to my way of thinking is a Hail Mary approach at saving the company. It's unclear, however, whether its printers can really gain traction against entrenched competitors, especially Hewlett Packard (HPQ) -- and especially if it prices printers above the competition in hopes to lure customers with lower-priced cartridges. (I still think consumers go for the lowest price in, not out -- even if the latter is more prudent.)

Meanwhile, the company continues to cut costs; however, it can only cut so much. I know, I know: Cash flow has been respectable, but some of that is coming from working capital; much more is from Kodak's medical business, which has been sold. Based on the company's slipping stock price today, the company's lack of specifics in its presentation with analysts did little to comfort the afflicted.

EK 1-yr chart:

Comments

[Tom B:]

"t's unclear, however, whether its printers can really gain traction against entrenched competitors, especially Hewlett Packard (HPQ) -" Not to menation companies that make BETTER printers than Kodak is likely to make: Brother, Canon.....

2007 Feb 09 08:38 AM

[D D:]

I have been using LEXMARK printers at home for years. I tell you that if KODAK comes out with a similar product and quality and it's INK PRICES are substantially lower I will switch without a doubt.

2007 Feb 09 11:22 AM

[Tom B:]

Yea, but ink is where they make their money.

2007 Feb 09 01:03 PM