Kodak Reports a Big Decline

Before the opening bell today, Eastman Kodak Co. (EK - Snapshot Report) posted struggling results for the third quarter in comparison to the year-ago quarter. The company reported a third-quarter loss from continuing operations of $111 million, or 41 cents per share, compared with earnings on the same basis of $101 million, or 35 cents per share in the year-ago period.
 
The company’s third quarter results demonstrate the success of continued focused investments that Kodak is making in new products and core growth businesses, especially consumer and commercial inkjet. Cost containment and more tightly focused spending on research and development also positively contributed to the company’s third quarter results.
 
Sales worldwide totaled $1.8 billion, a decrease of 26% from $2.4 billion in the prior-year period, including 2% of unfavorable foreign exchange impact. Revenues from digital businesses totaled $1.2 billion, a 26% decline from $1.6 billion in the prior-year quarter, primarily as a result of the global recession and continued restrictions in the credit markets that are dampening commercial printing purchases. Revenues from the company’s traditional business decreased 25% to $572 million, in line with the industry decline.
 
For the full year, Kodak expects its total revenues to decline by 12% to 18% year over year. However, expects an improvement in the fourth quarter results compared to the year-ago quarter.
 
The company’s ability to achieve significant improvement in fourth quarter results is predicated upon a modest improvement in the market for its consumer and commercial products, the introduction of new, higher-margin digital cameras and devices, stronger demand for its products, and the benefits from a number of intellectual property transactions executed in a manner that maximize shareholder value. Consistent with its seasonal trend, the company expects cash and earnings performance to improve significantly in the fourth quarter.