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Eastman Kodak moves to 2nd-quarter loss

/ Source: The Associated Press

Eastman Kodak Co. said Thursday it lost $189 million in the second quarter, its third consecutive quarterly deficit, as the global economic downturn hurt sales of digital cameras and other photography products.

The photography pioneer lost the equivalent of 70 cents a share in the April-June period, compared with profit of $495 million, or $1.62 a share, in the same quarter a year earlier.

The latest quarter included one-time charges of $75 million, or 28 cents per share, mainly related to restructuring and taxes. Excluding one-time items, Kodak lost $116 million, or 42 cents per share, in the latest period.

Sales plunged 29 percent to $1.77 billion.

Analysts polled by Thomson Reuters expected Kodak to post a loss of 37 cents per share on sales of $1.83 billion.

Revenue from digital businesses dropped 28 percent to $1.17 billion and traditional film-based revenue fell 30 percent to $593 million.

Kodak said its results reflected investments in new higher-margin digital cameras, video cameras and other consumer electronic products. Those moves, it said, will help lead to improved cash and earnings in the second half of 2009.

"We have every expectation that our cash flow pattern this year will mirror the pattern of previous years, with a sizable increase in cash generation in the second half," CEO Antonio Perez said in a statement.

Kodak spent $3.4 billion from 2004 through 2007 converting the bulk of its 129-year-old business from high-margin film to more competitive electronic technology. It is in the midst of cutting 3,500 to 4,500 jobs, which could reduce its work force to a 1930s-era low of 19,900 from a 1988 peak of 145,300.

Its consumer digital imaging division absorbed a $99 million operating loss in the quarter compared with a year-ago loss of $49 million as sales fell 33 percent to $503 million.

Hurt by a softer commercial printing market, graphic communications posted a $28 million operating loss, compared with a $13 million profit a year earlier, as sales fell 24 percent to $670 million.

The film, photofinishing and entertainment unit had an operating profit of $51 million, down from $54 million, as sales fell 30 percent to $593 million.

Rochester, New York-based Kodak is bracing for an estimated 12 percent to 18 percent slump in sales this year because of the recession. Through 2012, it expects revenue to rise 4 percent a year on average, driven by an 8 percent to 10 percent increase in digital sales.