Kodak announced fourth quarter/full year results

Results for the fourth quarter of 2005 included total sales of $4.197 billion, an increase of 12 percent from $3.759 billion in the fourth quarter of 2004. Revenue from "digital" totaled $2.674 billion, up 45 percent from Q4 2004’s $1.850 billion. Revenue from "traditional" was $1.514 billion, a drop of 21 percent from the year-previous $1.905 billion. The fourth-quarter loss from continuing operations, before interest, other income, net, and income taxes, was $162 million, 31 percent lower than the year-ago quarter’s $236 million loss.

Digital & Film Imaging Systems sales totaled $2.513 billion in the fourth quarter, down 3%. Earnings from operations for the segment were $76 million, compared with $135 million a year ago. Highlights for the quarter included a 65% increase in sales of home printing products and inkjet media, including a 95% increase in the sales of Kodak Easyshare Printer Docks; a 41% increase in consumer digital capture sales and a 23% increase in the sales of kiosks and related media.

For the year 2005, Kodak recorded total sales of $14.268 billion, up 6% from $13.517 billion in 2004. Reported net loss totaled $1.371 billion, or $4.76 per share, compared with net earnings of $556 million, or $1.94 per share, in 2004, largely stemming from a $1.1 billion non-cash charge in 2005 to record a valuation allowance against the net deferred tax assets in the U.S. Also contributing to the loss is the year-over-year increase in restructuring charges of $245 million, a decrease in earnings from discontinued operations of $325 million, due primarily to the gain in 2004 from the sale of the company’s Remote Sensing Systems unit, and a charge for a cumulative effect of an accounting change of $57 million in 2005. Net cash provided by operating activities from continuing operations totaled $1.180 billion for the year, compared with $1.146 billion in 2004.

CEO Perez said, in a printed statement, "Kodak is now a thriving digital company. The fourth quarter marked the first time that we managed the company as it will be run in 2006, and the digital earnings performance was exceptional."

Perez told the Financial Times in an interview that the only film sales he cares about are the motion picture film that Hollywood still consumes by the mile. "The movie business is great. Sure it’s going to go away, but not in the next two years," Perez told FT. "All I care about is that it stays with us for two years. If it stays – which I think it will – it will be gravy. But if it starts to go down, it won’t bother me." As for other types of film, their sales are "going down at a high speed. That’s it. There’s nothing we can do it about it," he shrugs. "Soon, I’m not going to be answering questions about film because I won’t know. It will be too small for me to get involved.“