Kodak’s 2nd quarter results: Sales down, digital businesses and loss up

According to a press release, digital revenue reached US-$ 1.089 billion (Euro 753.7 million), flat with the year-ago quarter. Revenue from the company’s core digital growth businesses – Consumer and Commercial Inkjet, Packaging Solutions, and Workflow Software and Services – increased 22 percent, fueled by a 48 percent revenue growth in consumer inkjet printers and ink.

Kodak’s Consumer Digital Imaging Group recorded sales of US-$ 404 million (Euro 279.6 million), down from US-$ 438 million (Euro 303.1 million) in the prior-year quarter. According to Kodak, this reflects a revenue decline in Digital Capture & Devices as the company executes its previously announced strategy to trade top-line growth for improved profitability. Second-quarter loss from operations for the segment was US-$ 92 million (Euro 63.7 million), improved from a loss of US-$ 123 million (Euro 85.1 million) in the second quarter 2010. Kodak said this earnings improvement reflected the continued growth of printer ink gross profit within Consumer Inkjet, the success of the company’s ongoing strategy profitability in Digital Capture & Devices as well as improved performance in Retail Systems Solutions.

Sales of Kodak’s Film, Photofinishing and Entertainment Group dropped 14 percent ot US-$ 396 million (Euro 274.06 million) in the second quarter, mainly due to continuing industry-related volume declines. Earnings from operations for the segment were US-$ 2 million (Euro 1.38 million), compared with US-$ 36 million (Euro 24.9 million) in the year-ago period. This decrease in earnings was primarily driven by significantly increased raw material costs, particularly silver, and industry-related declines in volumes, partially offset by cost reductions and price actions across the segment.

“We are enjoying success in our new growth businesses as well as the challenges typical in the creation of new businesses based on revolutionary new technologies,” commented Antonio M. Perez, Chairman and Chief Executive Officer of Eastman Kodak Company. “We are investing in these growth businesses to create a new profitable, sustainable digital company by 2012.”