OLD Media Moves

Kodak given benefit of the doubt — again

November 2, 2007

Posted by Chris Roush

TheStreet.com media critic Marek Fuchs wonders why business journalists have continued to give Kodak positive coverage despite its problems.

Marek FuchsFuchs wrote, “Are a lot of journalists photo buffs and sentimental fools for Kodak? It sure looked that way, because, as I catalogued, tons of headlines ran about Kodak swinging to a profit as more sales shift to digital. In fact, here was the puke-eminent example from The Wall Street Journal: ‘Kodak Swings to Profit As More Sales Shift to Digital Areas.’

“The headlines set my shutter speed aflutter, but then I actually read the earnings report. Hardly anyone highlighted the fact that the one-time sale of a health-care division contributed greatly to results. That digital victory? Ehh. Digital sales were up 3%, which is nothing to dismiss, but nothing that is going to save a giant, troubled company that is getting by at this point on a wing, prayer and cost cuts.

“Then came Thursday, a day that brought more evidence of Kodak’s overly favorable standing in the eyes of the business media. Any big, fatty operation like Kodak can cut costs for a long time. But you are almost never going to see evidence of a decisive, lasting comeback until revenue starts moving. That’s because, while you can cut jobs and much else for a long time, you can’t do it forever. At some point, you need revenue to rise. And if revenue stays stagnant, profitability tends to be fleeting.”

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