Insights

Why Eastman Kodak Stock Dropped 22.3% Wednesday

What happened
Eastman Kodak (NYSE: KODK), which specializes in commercial print and advanced materials and chemicals, saw its shares plummet 17% on Thursday. The stock is down more than 44% over the past year.
Image source: Getty Images.

So what
The company released its first-quarter earnings after the market closed on Tuesday, and the results were mixed. Revenue was $290 million, up 9% from the same quarter last year, though down 5% sequentially. Kodak also reported a loss of $3 million in net income, down from positive net income of $6 million year over year.
Operational earnings before interest, taxes, depreciation, and amortization (EBITDA) showed a loss of $7 million compared to positive EBITDA of $3 million in the same period in 2021.
In the company’s first-quarter earnings call, CEO Jim Continenza said the company’s losses were due to supply chain disruption; shortages in distribution, material, and labor; and increased costs of materials. He added that the company is taking steps to solve the problem by increasing lead times, stocking more materials, and by raising prices on its products.
Now what
The company had seemed to be bouncing back after having a strong year in 2021, when it increased annual revenue to $1.15 billion, up 11.76% over 2020. It also reported net income of $24 million in 2021 after losing $541 million in 2020. The latest report is a step back, and investors weren’t happy.
The company’s low price-to-earnings ratio of 17.57 makes it appear to be a bargain, but it is becoming clearer why it is valued so low. Before investors jump back in, they will likely want to see a couple of quarters of improved numbers. Kodak has fallen a long way from when it was the industry giant in film production.
Another concern is the company’s debt, which increased slightly to $1.2 billion, up from $1.194 in the same quarter in 2021. That increased debt load will make it more difficult for the company to fund future projects without sacrificing cash. As it is, it has only $309 million in cash, down from $362 million at the end of fiscal 2021.

 
 
 
Jim Halley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

What happened

Eastman Kodak (NYSE: KODK), which specializes in commercial print and advanced materials and chemicals, saw its shares plummet 17% on Thursday. The stock is down more than 44% over the past year.

Image source: Getty Images.

So what

The company released its first-quarter earnings after the market closed on Tuesday, and the results were mixed. Revenue was $290 million, up 9% from the same quarter last year, though down 5% sequentially. Kodak also reported a loss of $3 million in net income, down from positive net income of $6 million year over year.

Operational earnings before interest, taxes, depreciation, and amortization (EBITDA) showed a loss of $7 million compared to positive EBITDA of $3 million in the same period in 2021.

In the company’s first-quarter earnings call, CEO Jim Continenza said the company’s losses were due to supply chain disruption; shortages in distribution, material, and labor; and increased costs of materials. He added that the company is taking steps to solve the problem by increasing lead times, stocking more materials, and by raising prices on its products.

Now what

The company had seemed to be bouncing back after having a strong year in 2021, when it increased annual revenue to $1.15 billion, up 11.76% over 2020. It also reported net income of $24 million in 2021 after losing $541 million in 2020. The latest report is a step back, and investors weren’t happy.

The company’s low price-to-earnings ratio of 17.57 makes it appear to be a bargain, but it is becoming clearer why it is valued so low. Before investors jump back in, they will likely want to see a couple of quarters of improved numbers. Kodak has fallen a long way from when it was the industry giant in film production.

Another concern is the company’s debt, which increased slightly to $1.2 billion, up from $1.194 in the same quarter in 2021. That increased debt load will make it more difficult for the company to fund future projects without sacrificing cash. As it is, it has only $309 million in cash, down from $362 million at the end of fiscal 2021.

 
 
 

Jim Halley has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!