CAMBRIDGE, Mass. -- One year after its victory over arch-rival Eastman Kodak in a patent-infringement suit, Polaroid Corp. stockholders meet this week to celebrate the firm's 50th birthday amidst stunning profits.
The firm has reported record gains since January 1986, when a federal judge ordered Eastman Kodak out of the instant photography business, securing Polaroid's monopoly on the market.
Profits were up a staggering 180 percent in 1986, and company officials say 1987 may be the finest year yet for the firm founded by Edwin Land in September 1937.
A vote on a stock-split proposal (which is expected to pass) will highlight Tuesday's shareholders' meeting, which also includes a technical symposium on the company's continuing research into the use of mega densities, floppy disks, semiconductor lasers and thermal film.
Polaroid earned $103.5 million in 1986, up 180 percent from earnings of $36.9 million the previous year. Sales in 1986 were $1.63 billion, up 26 percent from $1.30 billion in 1985.
The company received a major boost from a federal judge in January 1986, ruling that Kodak had infringed several Polaroid patents in the instant-photography business. The ruling was upheld by a federal appeals court in April 1986, effectively ousting Kodak from the market.
'There was an injunction (against Kodak), which indeed helped our sales last year,' said Polaroid spokesman Sam Yanes. 'Certainly there were Kodak users who became Polaroid users.'
Prosperity continued in this year's first quarter, with earnings up 53 percent from the same quarter last year ($24.6 million compared with $16.1 million). First-quarter sales were up 17 percent, at $381.1 million.
'We expect the sales trend to keep going,' Yanes said. 'Forty percent of our business is overseas, so the strength of the dollar is a very big factor.'
The plunging dollar has made Polaroid cameras cheaper in European and Asian markets, especially in Japan.
Yanes also credits the introduction of the Spectra System line in May 1986 for the company's rapid increase in profits. The new model, priced between $130 and $150, helped boost the number of Polaroid cameras sold from 3.5 million in 1985 to 4.3 million last year.
The company does not, however, release individual sales figures for the Spectra or any other product line.
'Instant camera sales had gone down from 1978 until last year,' Yanes said. '1986 was the first year to buck the trend and I think Spectra had a lot to do with that.'
The Spectra did well right after it was first introduced, but industry analysts wondered if the camera had achieved its potenial when 1986 fourth-quarter sales were lower than originally predicted.
'Sales were less (in the fourth quarter) than some of the analysts' expectations,' Yanes said. 'But the expectations were so high because we had such gigantic sales in the third quarter.'
Camera retailers say they are pleased with Spectra and its cousin, Spectra Onyx.
'It was one of the best-selling cameras over the Christmas season,' said a salesman at Underground Camera in Cambridge.
'So far, so good,' said Paul O'Donnell, a salesman at Claus Gelotte Inc. in Waltham, Mass. 'Both cameras (Spectra and Spectra Onyx) have been doing pretty well, better than anything else in the Polaroid line. We've consistently done well with them.
'I personally find it's better than previous models,' O'Donnell said. 'The clarity of pictures is so much better.'
Another reason for the Spectra's popularity is Polaroid's offer of a $20 trade-in value on any camera toward the purchase of a Spectra.
'Everybody who comes in to buy one uses the rebate,' the Underground Camera salesman said.