Executive Business Briefing

Here is a look at more of Wednesday's top business stories:

Kodak to cut 3,500 to 4,000 jobs, earnings plunge

ROCHESTER, N.Y., Oct. 24 (UPI) -- Eastman Kodak Co., indicating it expects the economic downturn to continue into next year, said it plans to slash another 3,500 to 4,000 jobs worldwide in the fourth quarter.

For all of 2001, the company will have completed or initiated cost actions that will result in total employment reduction in the range of 6,500 to 7,500, including those announced Wednesday.

Kodak said the total estimated pretax savings from severance and other non-people actions will be approximately $400 million to $450 million for 2002.

Kodak also announced its third quarter net income plunged 77 percent to $96 million, or 33 cents a share, from $418 million, or $1.37 a share during the same period last year.

The largest photography company said excluding one-time items, the quarterly profit was 52 cents a share.

Analysts on Wall Street had expected the company to post a net income of 52 cents share, according to Thomson Financial/First Call.

Sales declined 7.9 percent to $3.31 billion from $3.59 billion a year ago.

Consumer Imaging sales declined 8 percent to $1.78 billion while earnings from operations for the segment plunged 45 percent.

"As we indicated on Sept. 19, the economic downturn intensified in the third quarter, and all signs suggest the weakness will continue into next year," said Daniel A. Carp, chairman and chief executive officer.

"I am pleased that in these challenging times, Kodak generated strong cash flow by reducing inventories and restraining capital expenditures. This allowed us to pare debt and positions Kodak to benefit once the economic rebound begins," he said.

The company said its operating cash flow was $316 million in the quarter. For the first three quarters of 2001, operating cash flow improved by $330 million from last year.

Debt was reduced by $356 million in the third quarter, to $3.493 billion, driven by the positive operating cash flow.

Kodak said the contraction of the U.S. consumer film industry intensified. Monthly retail volume in the quarter declined an average of 5 percent compared with the year-ago period. In September alone, the year-over-year decline was 13 percent.

Looking ahead the company said risk factors for the fourth quarter include the deepening economic downturn across the world.

Kodak said if pressures in Consumer Imaging and Health Imaging persist as anticipated, the company expects that earnings in the fourth quarter will not exceed 15 cents a share on an operational basis.

"Today's economic times are as challenging as any that Kodak and other U.S. companies have faced in recent decades," Carp said.

"We are committed to ensuring that Kodak is as financially strong as possible once we emerge from this period of economic contraction. Being fiscally responsible today is the best long-term course of action that we can take for our employees and shareholders," he added.

DuPont posts lower results

WILMINGTON, Del., Oct. 24 (UPI) -- DuPont Co., the nation's largest chemical company, said its third quarter net income before one-time items fell to $142 million, or 12 cents a share, from $562 million, or 51 cents a share during the same period last year.

Analysts on Wall Street had expected the company to post a net income excluding one-time items of 10 cents a share, according to Thomson Financial/First Call.

The company warned in late July its third quarter earnings could fall 70 percent or more from the year-ago period as the economic slowdown spread from the United States to Europe and Asia.

DuPont, which is a component of the blue-chip Dow Jones industrial average, said the lower net income reflected the continuing recession in U.S. manufacturing, resulting in significantly lower volumes and downward pressure on margins.

DuPont said its consolidated sales fell to $5.64 billion from $6.45 billion a year ago.

Raw materials costs moderated, resulting in about a $30 million after-tax increase versus third quarter 2000.

Segment sales declined 14 percent to $6.4 billion principally reflecting lower volumes and prices. Worldwide local currency selling prices were down 2 percent. Adverse currency effects, principally from the weaker euro and yen, reduced third quarter worldwide segment sales by 2 percent versus prior year.

The company said its worldwide volumes declined 9 percent. Pharmaceuticals impact on the volume variance versus third quarter 2000 was negligible.

U.S. third quarter sales volume was 12 percent lower, reflecting ongoing weakness in the U.S. economy. European volume declined 5 percent. While local currency prices were up 1 percent, the stronger dollar reduced U.S. dollar prices to 3 percent below last year.

Asia Pacific sales continue to weaken, down 14 percent, reflecting 6 percent lower volume and 8 percent lower U.S. dollar prices.

"During the quarter we kept our focus on careful cash management and the actions needed to meet our growth targets over time," said Charles O. Holliday, Jr., DuPont chairman and chief executive officer.

"Clearly we are experiencing one of the most challenging business environments the company has faced in decades. DuPont has the financial strength to face this challenge and to continue to invest in the future," he said.

Looking ahead the company currently expects that the U.S. economy will continue to weaken through the fourth quarter of 2001.

Honeywell posts loss

MORRIS TOWNSHIP, N.J., Oct. 24 (UPI) -- Honeywell International Inc. said it posted a third quarter net loss after taking a $1 billion charge for job cuts and restructuring efforts to combat a weak economy.

Honeywell reported a net loss of $308 million, or 38 cents a share, compared with a net income of $282 million, or 35 cents a share during the same period last year.

Profits from ongoing operations, before the charges, were $360 million, or 44 cents a share, compared with $613 million, or 76 cents a share a year ago.

Sales fell 6.9 percent to $5.79 billion from $6.22 billion a year ago.

Analysts on Wall Street had expected Honeywell, which is a component of the Dow Jones industrial average, to post a net income from ongoing operations of 44 cents a share, according to Thomson Financial/First Call.

Honeywell also said its results for the fourth quarter would meet Wall Street's targets.

The company expects to report earnings of 54 cents to 56 cents a share on sales of $5.8 billion.

Analysts expect a profit of 54 cents a share, according to Thomson Financial/First Call.

Honeywell took a third quarter charge of $1 billion against earnings related to severance actions and write-downs associated with business and manufacturing disposals and shutdowns. After taxes, the charge was $668 million, or 82 cents a share.

By the end of 2001, Honeywell said it expects to have cut 15,800 jobs out of a total work force of 125,000 worldwide.

The company has implemented plans to cut costs at its aerospace segment to offset the downturn in commercial air transport. At the Automation and Control business, Honeywell has cut jobs and combed the former Industrial Control and Home and Building Control businesses into one unit.

In 2002, the company expects to have slashed $1.3 billion in costs.

Honeywell said its aerospace operation posted a 2 percent decline in sales excluding the effects of divestitures. Sales at Automation and Control fell 2 percent while sales at Specialty Materials fell 19 percent in the third quarter.

The company's Transportation and Power Systems business saw sales rise 1 percent, excluding the effects of a strong dollar and divestitures. That strength was driven by demand in the global diesel-engine-powered vehicle market.

"Honeywell's third-quarter performance reflects a work in progress," said Chairman and Chief Executive Officer Lawrence A. Bossidy.

"Prior to the tragic events of September 11, we were engaged in aggressive across-the-board repositioning actions to address a softening economy," Bossidy said.

"The subsequent abrupt and unprecedented decline in the aviation industry led us to redouble our cost-reduction actions and further accelerate efforts to improve our performance. Even with the difficult operating environment this quarter, we saw double-digit sales growth in some key businesses," he said.

"The comprehensive cost actions taken this year make us confident in our ability to deliver $1.3 billion of cost productivity in 2002," Bossidy added.