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Kodak narrows loss in fourth quarter

Eastman Kodak, which is halfway through a restructuring to shift to digital, on Monday reported a 12 per cent rise in fourth quarter revenues led by a 45 jump in the sale of digital products and services.
/ Source: Financial Times

Eastman Kodak, which is halfway through a restructuring to shift to digital, on Monday reported a 12 per cent rise in fourth quarter revenues led by a 45 jump in the sale of digital products and services.

The company said digital sales, which offset a further fall in traditional products, represented 54 per cent of total revenue in 2005, the first time that digital revenue exceeded traditional.

Kodak said its net loss narrowed to $52m, or 18 cents a share, from $59m, or 20 cents a share, a year ago.

The fourth-quarter loss from continuing operations, before interest, other income, net, and income taxes was $162m, against a loss of $236m in the year-ago quarter. The loss was attributed mainly to $283m in after-tax restructuring charges, partly offset by a tax settlement with the Internal Revenue Service that resulted in the reversal of certain tax accruals totaling $243m.

Sales totaled $4.2bn, from $3.76bn in the fourth quarter of 2004. Digital sales rose to $2.67bn from $1.85bn. Traditional revenue was $1.514bn, down 21 per cent from $1.905bn.

Digital earnings were $161m, and were favorably impacted by a number of items, including a year-over-year increase in royalty income, which reflected gains from intellectual property, as well as the favorable impact resulting from the company's Graphic Communications Group acquisition.

"Kodak is now a thriving digital company," said Antonio Perez, chairman and chief executive. "The fourth quarter marked the first time that we managed the company as it will be run in 2006, and the digital earnings performance was exceptional."

Mr Perez said progress on the transformation to digital was made in the full year. "We completed an aggressive acquisition program that established Kodak as a powerhouse in the graphic communications market, we strengthened our market position in consumer digital with several innovative new product introductions, and we made substantial progress on our goal of reducing our traditional manufacturing footprint, while benefiting from the strong cash flows available from that business. We enjoy a solid cash position, and we are determined to expand profit margins in the sizable digital businesses that we have assembled."