 |
Kodak says it needs more money to survive
 |
The Associated Press-
Eastman Kodak warned Thursday that its very survival through to the end of 2012 depends on being able to sell its patents or being able to raise more money through a debt issue.
In a filing with the U.S. Securities and Exchange Commission, the photography pioneer said it would need additional funds to keep it operating as a going concern in the coming year. Its cash reserves are dwindling fast and are down to $862 million US as of the end of September.
"The company's ability to continue its operations … within the next 12 months is dependent upon the ability to monetize its digital imaging patent portfolio through a sale or licensing" or "the issuance of additional debt," the company said in its SEC filing.
Kodak has been trying to sell its portfolio of 1,100 digital imaging patents since July. Analysts say it could be worth at least $2 billion. But some think it could be worth far more than that.
Billion-dollar patent trove
Those with higher estimates of Kodak's patent trove point to July's $4.5 billion purchase of Nortel Networks' patents by an alliance that included Apple and Microsoft. In August, Google paid $12.5 billion for Motorola Mobility — largely for its 17,000 patents.
"It's pocket change for Google and Apple to go pay $3-or-$4-or-$5 billion for these patents," says Christopher Marlett, chief executive of MDB Capital, a California-based investment bank that specializes in intellectual property.
"There is an all-out nuclear war right now for global dominance in smartphones, tablets and mobile devices, and Kodak has one of the largest cache of weapons sitting there," says Marlett, who owns stock in Kodak.
While a multi-billion-dollar injection of funds from a patent sale would solve the company's short-term cash needs, it doesn't address the longer-term problem of how to transform the company into one that can again generate profits.
It latest earnings announcement Thursday served to highlight its dismal state. The company posted a wider third-quarter loss of $222 million US (83 cents a share) as film and digital camera sales continued to slump.
It was its ninth quarterly loss in the last three years and was two times larger than what analysts had been expecting.
Kodak also warned that its full-year revenues could be as much as four per cent lower than expected. Revenues in the third quarter plunged 17 per cent to $1.46 billion.
Printers at core of 'new' Kodak
On the brighter side, Kodak said it expected its consumer printer business to turn a profit in the current quarter. In the last few years, it has poured hundreds of millions into producing new lines of inkjet printers — a new core business for the iconic company. It's also pinning its turnaround hopes on commercial inkjet presses, workflow software and packaging solutions.
But investors in the embattled company took it on the chin again following the earnings release and news of the SEC filing.
The stock fell eight cents to close at $1.12 US.
533 page views
|
|
|
|