Eastman Kodak Halts Stock Buyback To Cut Debt

ByBridgeNews Eastman Kodak Co. suspended its stock buyback plan in order to reduce its debt and give it the financial flexibility to take advantage of possible acquisition opportunities, the company reported. "The current period of economic deceleration provides added incentive to pursue our stated goal of strengthening the balance sheet," says Kodak Chief Financial Officer Robert Brust. "We also want to ensure that we have the financial flexibility to consider acquisition opportunities that might arise during this time of economic weakness." The Rochester, N.Y.-based company emphasized that it is not suspending the buyback because it lacks the cash needed to continue it. First-quarter cash flows are in line with expectations, Kodak said. Kodak has been struggling in recent quarters as the slowing U.S. economy has reduced customer demand for its products. For all of 2000, Kodak revenues dipped 1% to $14 billion. Net income totaled $1.4 billion, or $4.59 per share. The company said in December that it plans to cut capital spending by $200 million, trim its product offerings, slash inventories by $200 million, and impose hiring limits. However, stricter spending controls will not deter the company from its plan to move into the digital arena, which Kodak believes constitutes a much larger market than traditional photography.