Eastman Kodak 2nd quarter results

On the basis of generally accepted accounting principles in the U.S. (GAAP), the company reported a second-quarter loss from continuing operations of $173 million pre-tax, $135 million after tax, or $0.47 per share, compared with a loss of $294 million pre-tax, $355 million after tax, or $1.24 per share in the year-ago period. Items of expense impacting comparability in the second quarter of 2007 totaled $266 million after tax, or $0.92 per share. The most significant item was restructuring costs of $316 million before tax and $248 million after tax, or $0.86 per share. In the second quarter of 2006, items that impacted comparability totaled $206 million after tax, or $0.72 per share, primarily reflecting restructuring costs.

Revenues of Kodak’s Consumer Digital Imaging Group (CDG) for the second quarter totaled $1.000 billion, down from $1.105 billion in the year-ago quarter, reflecting anticipated decreases in traditional photofinishing products and services at retail, partially offset by growth in consumer imaging services and imaging sensors. Digital product sales for CDG were $645 million for the second quarter of 2007 as compared with $647 million for the prior year quarter, representing a decrease of $2 million. The decrease was primarily driven by declines in sales of digital cameras and snapshot printing, partially offset by growth in intellectual property royalties and sales of digital picture frames.According to Kodak, the new consumer inkjet printer line continues to receive strong customer response and the company continues to expand retail distribution as it increases manufacturing capacity. Earnings from operations improved by $78 million to a loss of $55 million, compared with a year-ago loss of $133 million. This improvement was driven by changes in product portfolio management and lower SG&A expenses, partially offset by scaling of the manufacturing and new product introduction activities in the Inkjet Systems business.

Sales of Kodak’s Film Products Group were $559 million, down from $660 million in the year-ago quarter, a decrease of 15%. Earnings from operations were $137 million, compared with $119 million in the year-ago quarter, a strong improvement in the face of declining revenue, Kodak said. Due to a changing product mix, lower depreciation expense, and actions to reduce traditional infrastructure ahead of revenue declines, the group achieved a 25% operating margin during the second quarter of 2007, compared with 18% in the year-ago quarter.