Eastman Kodak (KODK) shares plummeted 5.26% in Tuesday's trading session, following the release of its mixed fourth-quarter 2024 financial results and subsequent earnings call. The sharp decline reflects investors' disappointment with the company's performance and outlook.
While Eastman Kodak reported some positive developments, including an increase in gross profit margin to 19% for Q4 2024, up from 17% in the same quarter of 2023, the overall financial picture remained challenging. The company experienced a 3% revenue decline in Q4 2024 compared to the previous year, and full-year revenue for 2024 decreased by 7% compared to 2023. Additionally, operational EBITDA for 2024 saw a significant 42% decline compared to the previous year.
Despite management's efforts to highlight growth initiatives, such as expanding the Advanced Materials and Chemicals (AMC) business and investments in film production capacity, investors seemed to focus on the negative aspects of the report. These included lower volumes, higher aluminum costs, and inventory reserve adjustments that impacted profitability. The company's cash position also weakened, ending 2024 with a cash balance of $201 million, a decrease of $54 million from the previous year. The market's reaction suggests that Kodak's turnaround efforts and strategic initiatives have yet to convince investors of a sustainable path to growth and profitability.