Eastman Kodak (NYSE: EK), which counts Sony (NYSE: SNE) and Canon (NYSE: CAJ) as related companies, continues its slide into fundamental hell. According to the third-quarter earnings release, sales declined a scary 26%, and a GAAP loss of 41 cents per share was reported. Last year at this time, Kodak produced positive income of 35 cents per share. According to Reuters, the adjusted loss of 23 cents per share was worse than analyst projections. Wall Street was hoping for something closer to a loss of 19 cents per share.

Don't you get the feeling management just doesn't know what to do? Kodak has become a conundrum of epic proportions. Just how is someone supposed to improve a situation that has gone so downhill?

Analyst upgrades:

• Goldman upgraded CTC Media (NASDAQ: CTCM) to Buy from Neutral on a better outlook for European Media names and raised its target on shares to $17.60 from $12.
• Morgan Joseph upgraded Movado (NYSE: MOV) to Buy from Hold after the company reported better-than-expected Q2 results. The firm set a $16 target on the stock.
• Needham upgraded LTX Credence (NASDAQ: LTXC) to Strong Buy from Hold following the company's Q4 results with a $3 price target.
• Canon (NYSE: CAJ) was upgraded to Outperform from Underperform at Macquarie.
• Whitney Holding (NASDAQ: WTNY) was upgraded to Buy from Neutral at SunTrust.
• Gafisa SA (NYSE: GFA) was upgraded to Overweight from Equal Weight at Morgan Stanley.

So, when you look at the second-quarter press release from Eastman Kodak (NYSE: EK), you notice something right off the bat. Part of the headline reads as follows: "Kodak Reports 2nd-Quarter 2009 Results, Reflecting Global Economic Realities." I don't think a shareholder can feel too encouraged after mentally processing the implied image that the results are like a mirror being held up to the ugly face of the recession, do you?

I didn't think so. Anyway, sales declined 29%, and I don't think we can use the currency issue to save the day on this particular top line. On an adjusted basis, the 43 cents from continuing operations that was lost during the quarter missed expectations by 7 cents, according to Reuters.

Eastman Kodak (NYSE: EK), whose colleagues include Canon (NYSE: CAJ) and Sony (NYSE: SNE), did not start its new fiscal year with a picturesque first quarter. No, it was more of an ugly, frayed-at-the-edges, nightmarish image of doom and gloom. And although the photography company does have a point when it states right at the beginning of the release that the global economic malaise is affecting its prospects, let's also be realistic. Kodak has been doing badly for a long, long time. This isn't just about the economy. This is about a company that still hasn't properly adjusted to a new, thriving business model.

According to this article, Kodak's adjusted loss of $0.95 per share from continuing operations missed Wall Street's call. By a lot. Some in the analyst community thought that Kodak would lose $0.44 per share. Others thought the company would lose less than even that figure. Doesn't matter what source you look at, the facts in the case make it clear that Kodak is not doing well. Worldwide sales shed just under 30% of their value. The digital segment fared very poorly in Q1.

I am the Global Editor at MoneyShow.com and each week I interview an investing expert. This week, I spoke with Charles de Vaulx, partner and portfolio manager at International Value Advisors, who brings us up-to-date on what his funds are currently buying.

Q. Charles, global markets have really taken it on the chin recently, yet you have bravely launched two new funds, IVA Worldwide (IVWAX) and IVA International (IVIOX). Does that mean that you are near-term optimistic on the markets?

A. The October 1st launch date of our two new funds was somewhat coincidental. We realized this spring that the private funds IVA offered were not sufficient and that there was a considerable demand for mutual funds. It took us a few months to get the registration of these mutual funds effective. But, though we believe our strategy is resilient to downturns, we are thrilled to launch these two funds now that stocks have become so much more attractive than a year ago.

Q. Your funds are not constrained by any particular sector or capitalization concentration, as long as the investments are value-oriented. What is your definition of value and in which sectors and countries are you currently investing the funds' money?

Famous maker of photographic equipment and supplies Eastman Kodak (NYSE: EK) reported earnings for the second quarter earlier this week, and they have not changed my opinion whatsoever on the stock. The shares are to be avoided at all cost.

Yeah, I've got to admit, I've been bearish on Eastman Kodak for a long time. It isn't difficult to hold such an opinion, of course. The company reported net income on a GAAP basis of $0.66 per share from continuing operations as opposed to a loss of $0.53 per share from continuing operations in the year-ago period. However, the results for the quarter include a gain of $0.88 per share from an IRS refund, offset by $0.09 per share in other items of net expense (this yields a net benefit of $0.79 per share). Considering that last year's Q2 was affected by a net of $0.92 per share due to restructuring charges (which were offset by gains on asset sales), it can be seen that the adjusted scenario isn't impressive in the least.

I just can't get past the utterly horrible story behind this company and its long-term performance. Simply put, Eastman Kodak just didn't adjust properly to the transition from film photography to digital photography as it was happening. It's trying to make amends, but it hasn't been easy. In fact, colleague Elizabeth Harrow recently wrote an informative article on the awful history of the company and how its stock has been one of the worst performers of the last decade. She discusses the impact of competition from businesses such as Sony (NYSE: SNE) and Canon (NYSE: CAJ), as well as the demand of one big stakeholder for management to expand its current buyback program.

With the soaring oil prices, oil bulls have been benefiting from nice gains lately but there are some pessimistic signs that this may be about to change. The Fed's comments related to inflation stirred some worries among investors that interest rates could be lifted soon. A boost in interest rates will immediately lead to a stronger dollar, and could (and should) result in a sell off in crude.

Talking about this circumstance, SmartMoney is thinking about the best way to protect ourselves against losing money. As a first step, SmartMoney suggests that we reduce commodities and increase our allocation in stocks. To back up this idea, the article cites Simeon Hyman, equity strategist of the portfolio advisory group at Lehman Brothers' private investment management unit, who said the company is currently lighter on commodities and "fully invested" in stocks.

David Reilly, director of portfolio strategies at Rydex Investments, is taking into account the possibility of investing in Japan, which "is the most oil-dependent of all major economies. Reilly cites companies such as Toyota Motor (NYSE: TM) and Canon (NYSE: CAJ) which could benefit from investors' attention due to declines in crude oil prices.

MOST NOTEWORTHY: Evergreen Solar, Myriad Genetics and Columbia Laboratories were today's noteworthy initiations:

• Kaufman Bros. believes Evergreen Solar (NASDAQ: ESLR) is well-positioned to take advantage of a decline in raw material costs because it makes its own wafers on its own equipment. The firm started shares with a Buy rating and $18 target.
  
• Myriad Genetics (NASDAQ: MYGN) was initiated at RBC Capital with an Underperform rating and $37 target and expects negative Phase III results for Flurizan when data is presented in June.
  
• Caris believes Columbia Laboratories (NASDAQ: CBRX) has two potential high value treatments, one to prevent preterm birth and the other to treat primary dysmenorrhea. Shares were initiated with a Buy rating and $11 target.

OTHER INITIATIONS:

• McDermott (NYSE: MDR) was initiated with a Buy rating and $70 target at KeyBanc.
  
• Morgan Stanley assumed Canon (NYSE: CAJ) with an Overweight rating.
  
• Polaris Industries (NYSE: PII) was initiated at William Blair with a Market Perform rating.

This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and check out other Battle of the Brands posts.

Rochester, New York-based Eastman Kodak Co. (NYSE: EK) was founded in 1892, and is well known for its wide range of photographic film products; it remains to this day the largest supplier of photographic films in the world. The company played a vital role in the invention and development of the motion picture industry, setting the standard of 35 mm film.

But times change. In 1999, Kodak entered into the consumer inkjet photo printers market in a joint venture with manufacturer Lexmark (NYSE: LXK). In 2004, Kodak announced it would stop producing traditional film cameras, beginning a multiyear struggle to refocus on digital photography and printing. Some of the results of that effort include the Kodak Smart Picture Frame, into which digital files are downloadable via a network connection. The Kodak Gallery is a website where users can upload photos into albums, print them out, and create mouse pads, calendars, and the like. And in 2006 Kodak announced that Flextronics (NASDAQ: FLEX) would manufacture and help design its digital cameras. Kodak also has long-term plans to sell ink jet printers and flat-panel displays.

Markets in Asia rose sharply.

The Nikkei was up over 2.6%. Canon (NYSE: CAJ) ralled 5.9%.

The Hong Kong Hang Seng rose almost 2.4%. China Mobile (NYSE:CHL) was up 3.9%.

The Shanghai Composite broke 5,000 for the first time.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Hewlett-Packard (NYSE: HPQ) has introduced another technology that demonstrates why the company often out-flanks rivals. The new product, which is free, allows mobile PC users to print documents on almost any printer. According to The New York Times, the system is called "Cloudprint".

The feature uses server-based software run on hardware owned and operated by HP. The Times writes that :"The service requires users to first "print" their documents to H.P. servers connected to the Internet. The system then assigns them a document code, and transmits that code to a cellphone, making it possible to retrieve and print the documents from any location." HP hopes the service will drive printer and ink sales.

HP's printing and imaging group is critical to the company's success. According to the HP 10-Q, the division represents 27% of the company's annual revenue and will do almost $30 billion this year. The operation competes with Lexmark (NYSE: LXK), Canon (NYSE: CAJ), and Kodak (NYSE: EK) for market share in the huge global printer market.

The HP initiative is an example of how the company's innovation prowess is keeping it ahead of its competition, but it is also a sign that server-based applications are growing in importance. Google (NASDAQ: GOOG) is offering several server-based products including its document and spreadsheet products. The move is seen as a challenge to Microsoft (NASDAQ: MSFT) which creates software the works primarily on individual PCs.

HPQ shares are up 80% over the last two years. but the company is not waiting for the competition to catch its breath.

Douglas A. McIntyre is a partner at 24/7 Wall St.

Monday March 26

• Tiffany & Co (NYSE: TIF) to report Q4 earnings; conference call at 8:30am. Analysts will evaluate Tiffany's holiday performance, new products and note management's comments on global diamond and jewelry trends.
• Boston Scientific Corporation (NYSE: BSX) to hold analyst meeting at 8:30am.
• Canon Inc ADR (NYSE: CAJ) to hold shareholder meeting at 10pm.

Tuesday March 27

• Goldman Sachs Group Inc (NYSE: GS) to hold shareholder meeting at 9:30am.
• McCormick and Company Inc (NYSE: MKC) to report Q1 earnings; conference call at 10am. Analysts will focus on McCormick's consumer segment [largest business], but will also note industrial business line performance, new spices/ingredients and commodity costs.

Wednesday March 28

• Teco Energy Inc (NYSE: TE) to provide 2007 outlook; webcast at 8am.
• Media Telecommunications & Entertainment Conference 3/28-3/29

Thursday March 29

• PDUFA date for Nastech Pharmaceutical Company Inc's (NASDAQ: NSTK) Calcitonin-Salmon Nasal Spray for Osteoporosis.

Friday March 30

• Finish Line Inc (NASDAQ: FINL) to report Q4 earnings; conference call at 8:30am. Note that the company issued disappointing guidance earlier this month.
• CKE Restaurants Inc (NYSE: CKR), the owner of Carl's Jr. and Hardee's restaurants, to report Q4 earnings; conference call at 9am. Analysts will review the company's same store sales by restaurant chain, average lunch/dinner checks, menu changes and margins. Analysts will also evaluate management's the performance of breakfast offerings, and the company's chain expansion plan.