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Thursday, April 07, 2005
Kodak cuts profit by $101M: Restated 2003, '04 results flow from accounting reform rules
Eastman Kodak Co. is lowering reported profits for the last two years and making other changes internally following an extensive review of accounting procedures mandated by new corporate reform legislation.
The company said Wednesday that earnings last year were $556 million, or $1.94 a share, down from $649 million, or $2.16 a share, reported on a preliminary basis in January. That's a difference of $93 million, or 14.3 percent. Kodak lowered profit for 2003 by $8 million, or 3 cents a share.
Kodak attributes the changes to a series of errors in accounting for income taxes, pensions and other post-retirement benefits. The mistakes will not change Kodak's reported revenue or cash flow, nor will they affect the company's ability to pay pension and other retirement obligations.
The errors triggered the review under the provisions of the Sarbanes-Oxley corporate reform bill, which attempts to provide greater transparency in financial reporting following a series of high-profile corporate scandals. An estimated 20 percent to 30 percent of the nation's largest companies are reporting accounting issues in connection with Sarbanes-Oxley, said Thomas Bonadio, managing partner of The Bonadio Group. The bill requires companies that uncover errors to identify the source of problems and implement corrections
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