Two more beaten-down Dow stocks report neutral to good earnings. Kodak reported earnings in line with expectations. The company is modestly optimistic about earnings for the rest of the year. Goodyear beat estimates that were recently lowered and expects competitive pressure for the rest of the year.
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Well, back to reality. On Friday, Kodak <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: EK)") else Response.Write("(NYSE: EK)") end if %> -- the least bad of our three money-losing stocks -- reported earnings. The $1.65 earnings per share (EPS) was in line with analysts' estimates, but, of course, the stock dropped. On a day as bad as last Friday, that's not too surprising, but the Dow dropped 1% while Kodak dropped 3% (and it dropped even more today).
The company said it expects to show modest growth through the third quarter, which is always a good sign. Consumer film sales are growing, although prices seem to be slipping a bit so that the increase in volume of film sold was greater than the increased revenue. So far the company has managed to increase volume enough to make up for soft prices.
Professional film sales dropped and the digital division lost money, although it lost far less than it did the second quarter of 1999. Perhaps the company is reaping the rewards of its investment in digital imaging.
Goodyear Tire <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GT)") else Response.Write("(NYSE: GT)") end if %> and Sears <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: S)") else Response.Write("(NYSE: S)") end if %> are the orphan stocks that are still in a number of Foolish Four portfolios started late last year. They were dropped from the Dow, and Goodyear has been dropping in price for months. Today it reported a modest increase in profits, beating estimates. Beating estimates in this case isn't such-a-much. The estimates had to be revised way down, from $0.58 to $0.38, in June when Goodyear issued an earnings warning. Actual EPS was $0.41. "Not as bad as expected" would be more accurate than saying they "beat estimates."
The company said that they expect to see the marketplace "remain competitive." That doesn't sound like optimism to me, but it can't hurt the stock since the expected competition is already reflected in the low stock price. All in all I would call it a neutral report, so, naturally, the stock rose a bit on a day when the Dow was down slightly.
Thursday we will report on earnings for DuPont <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DD)") else Response.Write("(NYSE: DD)") end if %>, 3M <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MMM)") else Response.Write("(NYSE: MMM)") end if %>, and Exxon Mobile <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: XOM)") else Response.Write("(NYSE: XOM)") end if %>, and that will be it on the earnings front for a while.
Fool on and prosper!