Eastman Kodak Co.'s bonds dropped and its credit default swaps widened as the company reported its seventh successive quarterly net loss. Kodak's 3 3/8% '33 bonds fell to 91 1/2 from 96 1/8, before rebounding to 93 1/8. Its five-year CDS widened 25 basis points to 295. The CDS was trading in the 270-280 context July 26, according to GFI Group.
Kodak reported a $282 million second-quarter net loss, compared with a $155 million net loss a year ago. The drop was largely due to $217 million in restructuring charges and rising silver costs, the company said in a release. The company's results are vulnerable to rising silver costs because it makes silver halide paper on which photos are processed. Sales decreased 9% over the year to $3.36 billion. KDP Investment Advisors lowered its 2006 EBITDA forecast on Kodak to $1.6 billion from $1.7 billion. A Kodak spokesman said the company will incur restructuring charges through to the end of 2007 when it expects to complete its transformation into a digital business. The company, which launched its restructuring in 2004, estimates it will incur a total of $3-3.4 billion in restructuring costs.