Recently, Eastman Kodak Company (EK) launched a new Consumer Electronics Show (CES) digital photography products and services and the next generation KODAK PULSE Digital Frame.

The new CES will help in numerous ways like easy sharing of photos, creating 3D images at home, etc. The latter will help in quick commenting on photos with a quick comment button on the frame’s touchscreen.

Moreover, Kodak reported improved results for the third quarter of fiscal 2010 with a loss per share (excluding one-time items) of 2 cents, compared with a loss per share of 23 cents in the year-ago quarter. The loss per share was much narrower than the Zacks Consensus Estimate for a loss of 31 cents. Net loss came in at $5.0 million from a loss of $63 million in the third quarter of fiscal 2009.

Also boosting our expectations is Kodak’s strategy to maintain a decent liquidity position with the expectation of $1.8–$2.0 billion of cash and cash equivalents in fiscal 2010.

Management has reiterated its sales guidance range of $7.5 billion to $7.7 billion for fiscal 2010, flat with the previous year. Kodak expects losses from continuing operations in the range of $50–$150 million, including $102 million in net charges for early extinguishment of debt in the first quarter of 2010.

Segment earnings from operations are expected in the range of $350– $450 million and EBIT is anticipated at $275–$375 million.

For fiscal 2010, Kodak expects net cash used in operating activities in the range of $50–$150 million and cash & cash equivalents in the range of $1.8–$2.0 billion.

However, Kodak operates in a highly competitive market and encounters aggressive price competition for all of its products and services from numerous companies globally. Kodak’s direct competitors include Canon Inc. (CAJ), Sony Corp. (SNE) and FUJIFILM Holdings Corp. (FUJIY). We are reiterating our Neutral recommendation on Kodak. The stock currently retains its Zacks #3 Rank (short-term Hold rating).

 
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