Kodak given benefit of the doubt — again

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

Fuchs 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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