Kodak did a similar thing with their European chemicals division last year. As I understand the financial aspects of that, it reduces their liability risks, thus saving them more money to buy back their own chemicals and products instead of continuing to run the manufacturing facilities. This stuff is buried deep within numerous pages of SEC reports, in case you ever find yourself so massively bored you might want to read them.
Don't forget that Kodak are trying to position themselves as the dominant player in the commercial printing and graphic arts supplies industry (GCG at Kodak). A huge part of the commercial printing industry is printing negatives, which need chemicals similar to film chemicals. This division (GCG) and medical imaging are the cash cows at Kodak, while consumer imaging is barely 1/3 of revenues.
Kodak also now outsource almost all consumer digital P&S camera production, so if someone wanted to make a spin of the facts with that it might be claimed that Kodak are getting out of digital imaging . . . the reality is that the prominent basis for future profits at Kodak will become products and services for companies, and not from consumer products. Go back through enough SEC reports, and you will find it has been many years since Kodak got the majority of profits from film sales, though the public perception has often been that Kodak is only a film company. Just like many things with WallStreet, it is often too much of buy on the rumour, then sell on the news.
Ciao!
Gordon Moat
Dead Link Removed
