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Kodak withdraws 2008 revenue guidance, freezes executive pay

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Kodak withdraws 2008 revenue guidance, freezes executive pay

Chicago (IL) – Kodak is the next company in line telling its investors that a “deepening global recession” is impacting its financial performance and force the company to take cost-reducing actions. The company did no restate its revenue guidance, but chose to withdraw a previously given guidance for H2 2008 as well as the entire year instead.

The publicly announced cost reduction measures describe a “streamlined cost structure”, but no layoffs were announced. However, the company did say that it will tighten up its investments, temporarily suspend the firms 401(k) match in 2009 and that, “where permissible by law”, its executives would not receive a salary increase in 2009. Also, Kodak told its executives that they are unlikely to receive a payout in 2009 from the company’s executive Leadership Stock program based on 2008 performance.

“In recent weeks, and subsequent to providing its forecast on October 30, 2008, the company has seen the dramatic slowdown in consumer spending continue and worsen,” Kodak said in a statement.

“Additionally, businesses are reducing capital expenditures, and as credit markets remain very tight, commercial customers are finding it increasingly difficult to secure financing for new equipment purchases. Real estate markets also remain weak, making sales of the company’s surplus assets more difficult. Dramatic changes in the value of the U.S. dollar in countries where the company sources and sells its products are also reducing revenue and earnings.”