Eastman Kodak Co. said Wednesday it has withdrawn its full-year 2008 operating profit and sales forecast because of a weak economy and stronger dollar, and says executives will not receive a salary increase next year.
The Rochester, N.Y.-based photographic products company said consumer spending has slowed dramatically, and tight credit markets are making it hard for shoppers to secure financing for new equipment purchases.
"There is an unprecedented amount of uncertainty surrounding the economic environment and most signs indicate that we may be facing a prolonged global recession," Chief Executive Antonio M. Perez said in a statement.
Kodak also said "dramatic" changes in the dollar's value are hurting earnings and sales. A stronger dollar makes its products more expensive to customers abroad.
Also on Wednesday, Kodak said executives will not receive a salary increase next year and its 401k plan will be suspended temporarily.
"We will continue to take prudent actions necessary to ensure that Kodak is well positioned to take full advantage of the economic recovery when it comes," Perez said.
In October, the company forecast 2008 operating profit of $200 million to $250 million, down from $400 million to $500 million. Kodak also lowered its outlook for full-year revenue growth at that time, forecasting a decline of 3 percent to 5 percent from 2007 sales of $10.3 billion.
Also in October, Kodak said it planned to slash more jobs, but did not say how many. That's in addition to the thousands of job cuts the company has already made over the past several years as part of a restructuring.
Kodak will update investors on its business when releasing fourth-quarter and full-year 2008 results on Jan. 29.