Eastman Kodak Company: Negative second quarter

Kodak’s second quarter revenue totaled US-§ 3.686 billion, up six percent from the same period last year. Sales growth was favourably influenced by foreign exchange in the amount of US-$ 54 million or two percentage points. Earnings from continuing operations reached US-$ 160 million, a decline of 30 percent against the second quarter 2004.

Sales of Kodak’s Digital & Film Imaging segment totaled US-$ 2.151 billion, down 12 percent. Earnings from operations declined 15.3 percent to US-$ 193 million. On the positive side, sales of Kodak EasyShare Printer Docks and related media increased 63 percent, sales of consumer digital capture products including Kodak EasyShare cameras grew 25 percent, and sales of Kodak Picture Maker kiosks and related media recorded a plus of 24 percent.

Sales of Kodak’s Graphic Communications Group were up 144 percent and reached US-$ 794 million, largely reflecting the acquisition of Kodak Polychrome Graphics (KPG) plus higher sales at Kodak Versamark and NexPress. On a GAAP basis, the loss from operations in the second quarter was US-$ 33 million. The Health Group achieved sales of US-$ 694 million, up three percent, with earnings from operations of US-$ 113 million, down from US-$ 124 million in the second quarter 2004.

According to Antonio Perez, CEO of Eastman Kodak Company, the company will accelerate its current restructuring of the traditional manufacturing infrastructure. In January 2004, the company committed to reducing employment by as many of 15,000 positions. The administrative and manufacturing actions announced today, along with the number of smaller actions, will bring the total worldwide employment reductions since January 2004 to a range of 22,500 to 25,000. Perez pointed out that Kodak will work hard to improve its cost structure, particularly in the traditional business. “We will foundamentally change how we do our work, resulting in a significantly lower structural cost.”