updated 5/4/2007 9:56:19 AM ET 2007-05-04T13:56:19

Eastman Kodak Co. reported a narrower loss for its first quarter on Friday, its ninth deficit in the last 10 quarters as it applies some final touches to a drastic digital makeover.

The photography company lost $151 million, or 53 cents a share, in the January-March period versus a loss of $298 million, or $1.04 a share, a year ago when it took hefty charges linked to its massive overhaul.

Sales fell 8 percent to $2.12 billion from $2.89 billion a year ago.

Its overall digital sales in the latest quarter fell 3 percent to $1.2 billion, while revenues from film, paper and other traditional, chemical-based businesses dipped 13 percent to $896 million.

Excluding one-time items totaling $76 million, or 26 cents a share — including restructuring charges of $85 million, or 29 cents a share — Kodak fell short of Wall Street expectations by losing $98 million, or 35 cents a share.

Analysts surveyed by Thomson Financial had forecast a loss of $3.8 million, or 2 cents a share, on sales of sales of $2.1 billion.

In last year's first quarter, Kodak's operating loss was $157 million, or 55 cents a share.

Last week, Kodak formally wrapped up the $2.35 billion sale of its health-imaging business to Canadian investment firm Onex Corp. It has already paid down $1.15 billion in debt and plans to funnel the rest of the proceeds into digital ventures as profits from its storied film business rapidly erode.

In February, it launched a costly foray into a high-margin inkjet-printer market dominated by Hewlett Packard Co. Its trio of home printers produce documents and photos using ink cartridges that cost roughly half as much as the competition's, and analysts think the move could trigger a price war.

"At this point we are selling all that we can make and we are bringing on retailers as quickly as we can supply them," said Chief Executive Antonio Perez, who expects to unload a half-million inkjet printers this year.

Now in the final year of its historic four-year makeover, Kodak has piled up $2.7 billion in restructuring charges and accumulated $2.1 billion in net losses over the last 10 quarters.

In February, the picture-taking pioneer said it was eliminating 3,000 more jobs _ bringing its planned tally of layoffs to 28,000 to 30,000 since 2004. By year-end, its work force will slip below 30,000, less than half what it was just three years ago.

Even before shedding its health unit, which employs 8,100 people, its work force had dipped below 50,000 from a peak of 145,300 in 1988.

Sales of consumer digital imaging products fell 14 percent to $778 million largely because of its emphasis on improving digital profit margins, such as selling higher-end cameras.

Film products sales fell 8 percent to $458 million, a much smaller drop than in previous quarter as sales in its entertainment imaging unit rose 8 percent. Graphic communications sales eased 1 percent to $864 million.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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