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Carp Out as Kodak CEO

The 57-year-old chief is retiring amid a controversial digital transition.
Author:

Daniel Carp, the

Kodak

(EK)

chief executive whose decision to reorient the camera company around digital imaging has been a source of enduring controversy, announced Wednesday that he will retire at 57.

Carp will be succeeded by Antonio Perez, the longtime

Hewlett-Packard

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executive who was named Kodak's president and chief operating officer two years ago. The Spaniard is two years' Carp's senior.

Perez was named president and chief executive effective immediately. Carp will remain chairman until the end of 2005, at which time Perez will assume that position.

The appointment comes as Carp's vision for an all-digital Kodak remains in flux. While the company has made decent progress in areas like medical imaging and commercial printing, it reported first-quarter earnings last month that missed Wall Street estimates by 30 cents a share. Carp chalked up the misstep to predictable volatility during a transition while simultaneously conceding that "the quarter wasn't what we wanted."

Kodak said digital product sales rose 23% from a year ago to $1.3 billion in the first quarter, while sales in its traditional lines like camera film slid 18% to $1.5 billion.

The company's $2.4 billion in debt was recently cut to junk by both Moody's and Standard & Poor's. The latter cited an "accelerated decline" in traditional lines and warned that the situation would worsen if the company can't "effectively reduce costs to support the profitability of its traditional imaging businesses and continue to increase its digital profits."