Kodak cuts Q3 loss to $37m, revenues decline to $3.2bn

NEW YORK: Photography company, Eastman Kodak, on Tuesday said its quarterly loss narrowed from a year earlier, when it took a $778m tax-related charge, and revenue fell as traditional film sales declined 19%.

The world’s top maker of photographic film, which is undergoing a lengthy and expensive transformation into a maker of digital cameras and printing products and services, posted a net loss of $37m, or 13 cents a share, compared with $914m, or $3.18 a share, a year earlier.

Excluding restructuring costs and other special items, the company reported a profit of 44 cents a share, exceeding the analysts’ average expectation of 19 cents. Analysts have found it difficult to measure Kodak’s overall health due to the constant restructuring over the past three years.

While some units have grown and added workers, others are cutting operations and jobs. Third-quarter revenue slipped to $3.2bn from $3.55bn, missing the analysts’ view of $3.28bn. Digital earnings rose to $105m from $7m a year earlier.

Kodak, which cut its full-revenue outlook on August 1, said it was confident it could meet its ’06 digital earnings goals, but digital revenue growth would be somewhat below its 10% target as a result of its plan to focus on products that yield higher profits.

One year ago, Kodak posted a large noncash charge to write down of the value of deferred tax assets as a result of current and expected US losses from its extensive restructuring launched in January ’04. Since late ’03, Kodak has focused on digital devices, hoping to outpace the drop in demand for film, historically its main revenue source.

At the same time, it is reducing costs by cutting up to 27,000 jobs and trimming manufacturing. Kodak shares closed on Monday at $23.75 on the New York Stock Exchange.

Although the revenue warning had sent the stock down 14%, the shares have more than recovered since then, rising about 24%.