Eastman Kodak: First quarter “in line with expectations”

Revenue from digital businesses increased 10 percent to US-$ 1.37 billion. “Our first-quarter results are very much in line with our expectations, which included forecasted seasonality, and provide an early indication that Kodak is on a growth track,” commented Chairman/CEO Antonio M. Perez. “We delivered strong performance across our major digital businesses, reinforcing our confidence in achieving our revenue, earnings and cash goals for the year.”

Sales of Kodak’s Consumer Digital Imaging Group grew 20 percent to US-$ 554 million in the first quarter; the operating loss for the segment increased from US-$ 75 million in the first quarter 2007 to US-$ 111 million this year, mainly due to planned investments in the Consumer Inkjet business, partially offset by continued earnings improvement in digital cameras and digital picture frames, the company said.

The Graphic Communications Group recorded sales of US-$ 812 million (plus 4 percent) with an operating loss of US-$ 1 million after an operating profit of US-$ 9 million in the first quarter 2007. According to Kodak, this earnings decline was primarily driven by higher aluminium costs and planned R&D investment in the commercial inkjet printing business. At drupa, which will take place from May 29 to June 11 in Duesseldorf, Germany, Kodak will announce its new Stream Technology, a “revolutionary approach to continuous inkjet printing that provides offset-class quality, speed and cost,” the company said.

Sales of Kodak’s Film, Photofinishing and Entertainment Group declined 13 percent to US-$ 724 million in the first quarter; the operating result declined 13.7 percent to US-$ 26 million, mainly due to increased silver and other raw material costs, decreased sales volume in photographic film and paper and the effect of the Hollywood writers’ strike.

For the the current year, Kodak forecasts a total company revenue growth in the range of 0 to 2 percent and a digital revenue growth in the range of 7 to 10 percent.

After the announcement of the first-quarter results, Kodak’s stock temporarily dropped from more than 18 US-$ on April 30 to less than 17 US-$, but recovered to US-$ 17.22 when the New York stock exchange was closed on May 1, 2008.