According to a press release, the company‘s first quarter loss from continuing operations, before interest, other income (charges), net and income taxes was US-$ 188 million, compared with a loss of US-$ 324 million in the year-ago quarter.
Sales of Kodak‘s Consumer Digital Imaging Group totaled US-$ 778 million, down 14 percent, largely reflecting declines in digital capture revenue as a result of the company‘s strategy to reduce its digital camera portfolio in the low-end price range. Photofinishing services at retail and snapshot printing also decreased, while sales of kiosks and related media (plus 3 percent), imaging sensors and royalty revenues increased in the first quarter. Loss from operations for the segment was US-$ 114 million, compared with a year-ago loss of US-$ 167 million, mainly due to significantly lower SG&A expenses, partially offset by higher silver costs. Positive developments during the first quarter included a 23 percent sales increase in the Kodak Gallery.
Sales of Kodak‘s Film Products Group were down 8 percent to US-$ 458 million, a significantly lower decline than has been recently experienced, reflecting high single-digit year-over-year growth in the entertainment film business, Kodak said. Earnings from operations were US-$ 74 million, compared with US-$ 51 million in the year-ago quarter, improving the operating margin from 10 percent in the first quarter 2006 to 16 percent in the first quarter this year.
Turnover of the Graphic Communications Group was essentially flat with US-$ 864 million with earnings from operations of US-$ 16 million (first quarter 2006: US-$ 24 million), mainly due to higher aluminium and silver costs, partially offset by lower SG&A expenses.
Kodak‘s Chairman and CEO Antonio M. Perez said he was encouraged by the “enthusiastic consumer and retail response to our new line of inkjet printers“. While Kodak‘s goal remains to sell at least 500,000 units in 2007, the company plans to increase its 2007 inkjet investment by as much as US-$ 50 million in order to accelerate the market introduction and boost new product development. This decision will impact Kodak‘s full-year results by lowering the company‘s expected cash flow and digital earnings. As a result, the company expects net cash generation this year of greater than US-$ 100 million (after restructuring cash disbursements of approximately US-$ 600 million). Additionally, the company now expects 2007 full-year digital earnings from operations of US-$ 150 million to US-$ 250 million, which corresponds to a GAAP loss from continuing operations before interest, other income (charges), net, and income taxes for the full year of US-$ 550 million to US-$ 650 million. The company originally estimated 2007 full-year digital earnings of US-$ 200 million to US-$ 300 million, corresponding to a GAAP loss for the full year of US-$ 500 million to US-$ 600 million.
Finally, the company continues to forecast 2007 digital revenue growth of 3 to 5 percent, with total sales expected to be down between 4 to 7 percent.