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ROCHESTER — Eastman Kodak Co. scrapped its dividend and trimmed the salaries of top executives Thursday, blaming the global economic downturn for a wider first-quarter loss and sliding sales of digital cameras and other photography products. Its stock fell 15 percent.
The photography pioneer said it lost $353 million, or $1.32 a share, in the January-March quarter, compared with a loss of $115 million, or 40 cents a share, a year earlier.
Sales plunged 29 percent to $1.48 billion from $2.09 billion a year ago, hit by a sharp slowdown not only for chemical-based film and paper but a new world of electronic-imaging products from cameras and picture frames to retailer kiosks and high-speed commercial presses.
Excluding restructuring and other one-time items totaling $105 million, or 39 cents a share, its latest loss was 95 cents a share. Analysts were looking, on average, for a comparable loss of 33 cents a share on $1.64 billion in revenues.
The stock, which skidded to an all-time low of $2.01 in March, fell 55 cents to $3.90 in afternoon trading.
"This global recession is truly unprecedented — I know you know that. None of us has seen anything like that in our business career," Chief Executive Antonio Perez said in a conference call with analysts.
"Like other technology companies, we're suspending the dividend to ensure we have the cash to fulfill the promise of our core investments" in such digital businesses as consumer inkjet printers and high-speed commercial presses and software.
Aside from stopping the 25-cent semiannual dividend, Kodak said its U.S. employees would be required to take a week off without pay this year. Perez, whose base salary of nearly $1.1 million hasn't changed since he took the helm in 2005, will take a 15 percent salary cut of about $107,500 for the balance of the year while other senior executives will take 10 percent cuts.
Converting the bulk of its 129-year-old business from high-margin film to more competitive electronic technology cost Kodak $3.4 billion from 2004 through 2007. It is in the midst of cutting 3,500 to 4,500 jobs, which could reduce its work force to a 1930s-era low of 19,900 from a 1988 peak of 145,300.
Digital sales slumped 29 percent to $972 billion from $1.366 billion in last year's first quarter, while traditional film-based revenue fell 31 percent to $503 million from $724 million.
Kodak's results "were terrible but not a surprise — the economy has not helped at all," said Ulysses Yannas, a broker with Buckman, Buckman & Reid in New York. "To me, what is a plus is elimination of the dividend. It saves them $134 million a year."
Its consumer digital imaging division absorbed a $157 million operating loss in the quarter compared with a year-ago loss of $111 million as sales slid 33 percent to $369 million.
Hurt by a softer commercial printing market, graphic communications posted a $60 million operating loss, compared with a $1 million loss a year earlier, as sales fell 26 percent to $603 million.
The film, photofinishing and entertainment unit had an operating profit of $8 million, down from $26 million, as sales dropped 31 percent to $503 million. Sizable cost reductions and lower retiree benefits were more than offset by a slide in consumer film sales and unfavorable currency exchange rates.
Kodak is bracing for an estimated 12 percent to 18 percent slump in sales this year because of the recession. Through 2012, it expects revenue to rise 4 percent a year on average, driven by an 8 percent to 10 percent increase in digital sales.
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