Kodak intends to use the net proceeds from the offering to repurchase the entire $300 million, the total principal amount of its 10.50% Senior Notes due 2017 and to repurchase $200 million, the total principal amount of its 7.25% Senior Notes due 2013 through a tender offer.

Kodak also has a strong balance sheet with net cash of $833 million at the end of December 2009. Moreover, the company has announced plans to implement a targeted cost reduction program (the 2009 Program) to resize itself in view of the current economic environment. The program, along with new product launches and numerous expansion programs will enable the company to grow despite the difficult environment.

However, Kodak operates in a highly competitive market, and encounters aggressive price competition for all of its products and services from numerous companies globally.  Based on its international distribution, Kodak is subject to foreign currency risks, changes in interest rates and commodities costs, which are volatile in nature.

As part of the business strategy, Kodak frequently engages in discussions with third parties regarding possible investments, acquisitions, strategic alliances, joint ventures, divestitures and outsourcing. The company may face integration and other risks related to these transactions, which in turn will have a material adverse impact on its profitability.

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(EK) Eastman Kodak Company Prices $500 Million in Notes

In 2009, Kodak expanded its Center of Operations and Support, comprising customer service and internal operations, in Xiamen. The center offers order processing, business procedures and other services, as well as human resources and financial support. In August 2009, Kodak relocated its Southeast Asia-based Logistics Center to Xiamen to support its fast-growing business in the Asian market. These two strategic moves demonstrate the company’s commitment to its key markets.

Recently, Kodak reported results for the fourth quarter and fiscal year 2009. Earnings came in at $1.36 per share, compared to a loss of $3.40 per share in the fourth quarter of 2008. Results were much above the Zacks Consensus Estimate of 18 cents.  Full- year 2009 losses were $232 million or 87 cents versus a loss of $727 million or $2.58 in 2008 and a loss of $1.47 according to the Zacks Consensus Estimate.

Fourth-quarter sales were $2,582 million, a sequential increase of 45% from the third quarter of 2009 and a 6% increase from the year-ago quarter, including 4% from a favorable foreign exchange impact. Full-year revenue totaled $7,606 million, a 19% decline from 2008. These results reflect the recession’s impact on demand, especially in the first half of 2009.

In January 2009, Kodak executed a targeted cost reduction program (the 2009 Program) to resize itself in view of the current economic environment. This, along with new product launches and numerous expansion programs, will enable the company to grow despite the difficult environment.

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(EK) Eastman Kodak Company Expands Chinese Facility

Kodak reported earnings from continuing operations of $439 million, or $1.36 per share, compared to a loss of $914 million or $3.40 per share in the fourth quarter of 2008.  Reported EPS was far above the Zacks Consensus Estimate of $0.18. Full-year 2009 losses were $232 million or $0.87 versus a loss of $727 million or $2.58 in 2008 and a loss of $1.47 according to the Zacks Consensus Estimate.

Fourth-quarter sales were $2.582 billion, a sequential increase of 45% from the third quarter of 2009 and a 6% increase from the year-ago quarter, including 4% from a favorable foreign exchange impact.

Revenue from digital businesses totaled $1.991 billion, a 12% increase from $1.779 billion in the prior-year quarter, resulting from the combination of an increase in non-recurring intellectual property licensing revenue and increased demand for consumer inkjet printer systems, kiosk media and digital plates. Revenue from the company’s traditional business decreased 10% year over year to $589 million for the fourth quarter due to the reduction in demand across all traditional businesses, particularly Entertainment Imaging.

Full-year revenue totaled $7.606 billion, a 19% decline from 2008. Full-year digital revenue totaled $5.345 billion, a 17% decline from 2008, and traditional revenue totaled $2.257 billion, a 24% decline. These results reflect the recession’s impact on demand, especially in the first half of 2009.

Net cash used in continuing operations from operating activities increased $8 million for the year ended December 31, 2009 compared with the prior year. However, Kodak has a strong balance sheet with net cash of $833 million at the end of December 2009.

During the fourth quarter, the company announced plans to implement a targeted cost reduction program (the 2009 Program) to more appropriately size the organization in view of the current economic environment. The execution of the program began in January 2009. This, along with new product launches, will enable the company grow despite the difficult environment.

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(EK) Eastman Kodak Company Surpasses Expectations

Kodak, which has been a pioneer in developing technology associated with OLED displays, said that it will continue to have access to its OLED technology for use in its products.

The company noted that this decision in consistent with its strategy of repositioning some of its businesses to maximize its competitive advantage at the intersection of materials and imaging science. Kodak pointed that though OLED intellectual property portfolio is fundamental, realizing the full value of this business would have required significant investment.

This transaction is expected to close by the end of the year.

In addition, Kodak said that it has entered into a technology cross-license agreement with LG Electronics, Inc., which will allow each company broad access to the other’s patent portfolio. The license agreement is royalty-bearing to Kodak. The company did not disclose additional financial details.

The companies also agreed to conclude their patent litigation, which involved a subset of their imaging technologies. Pursuant to a settlement agreement, Kodak and LG will request that the U.S. International Trade Commission terminate the investigations initiated earlier this year following complaints filed by both the companies in late 2008.

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(EK) Eastman Kodak Disposes OLED Business

We expect revenue in 2009 to be hurt by weak consumer spending and the poor global economy, and believe the company will struggle to meet expectations in fiscal 2010. We maintain our estimates for the full year 2009. 2011 estimates have been added.

We also maintain our Underperform recommendation on CAJ shares, but increased our six-month target price to $30.00.

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(CAJ) Canon, Incorporated – Bear of the Day

The company also lowered its revenue forecast but earnings forecast remained unchanged for the full year 2009, which is still below the 2008 level. We expect revenue in 2009 to be hurt by weak consumer spending and worsening global economy and believe the company will struggle to meet expectations in fiscal 2009.

We maintain our estimates for the full year 2009. We also maintain our Sell recommendation on CAJ shares but increased our six-month target price to $30.00.

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(CAJ) Canon Incorporation – Bear of the Day