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Kodak Digital Earnings Soar by $98 million in Q3

Kodak Digital Earnings Soar by $98 million in Q3

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October 31, 2006 – Eastman Kodak Co. reported a 10 percent decrease in net sales but a significant growth in digital earnings in the third quarter year-over-year.

In this third quarter, Kodak’s net worldwide sales totaled $3.2 billion, down 10 percent from $3.5 billion in the third quarter last year. The drop in net sales was due to an overall reduced number of sales as well as unfavorable pricing, according to today's Kodak press release.

The drop in sales worldwide is consistent with net sales in the U.S.; Kodak reported American sales totaled $1.2 billion, down 11 percent from last year’s $1.4 billion.

Despite the drop in net sales, Kodak digital earnings jumped in the third quarter. In 2005 Q3, Kodak made $7 million in digital earnings. This quarter, digital earnings soared, 15 times more than last year, to $105 million. The significant rise is due to "operational improvements," according to the release.

"Our business transformation is on track," said Kodak CEO and Chairman Antonio Perez. "I am encouraged by our third-quarter results, especially because they reinforce our confidence in our full-year performance," he said.

Digital revenue remained relatively steady at $1.7 billion this quarter with a 1 percent decrease from last year’s $1.8 billion. Kodak expects their 2006 fiscal year will reach 10 percent below target in digital revenue.

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Kodak’s net loss totaled $37 million this quarter. Although Kodak continues to face net losses, this quarter showed significant improvements from last year’s $914 million in net losses. The large difference is due to a tax valuation charge of $778 in the 2005 Q3, including taxes for property.

"While I am fully aware of the challenges to largely complete our restructuring by the end of next year, this performance represents clear progress toward our goals and gives us good momentum to carry into in the fourth quarter and 2007," said Perez in the release.

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