The Wall Street Journal reports Moody’s Investors Service cut Eastman Kodak Co. credit ratings a notch to Caa1, , seven notches from investment-grade territory, with a negative outlook. Moody’s is the second agency, after Standard & Poor’s, to move the film company to highly speculative territory this week. Moody’s noted the company’s “weak financial performance and the challenges Kodak faces in achieving sustained profitability and positive cash flow.”
According to Moody’s, the downgrade “reflects the ongoing weakness in the company’s core business operations that we believe will remain challenged to achieve and sustain profitability” says Richard Lane, Moody’s senior vice president. Excluding potential intellectual property (IP) licensing income and proceeds from non strategic asset sales, “we believe the company could see its current $1.6 billion cash balance decline by $600 million to $700 million during 2011,” says Lane.