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Kodak Reports Improved Profits; Inkjet Businesses Show Revenue Growth

October 28, 2010
ROCHESTER, NY—Oct. 28, 2010—Eastman Kodak Co. today reported third-quarter results that reflect continued momentum of the company’s major strategic digital growth businesses, improved operating efficiencies, and the successful conclusion of an intellectual property licensing agreement, all contributing to year-over-year improvement in profitability and positive cash generation.

Third-quarter sales were $1.758 billion, a 1 percent decrease from the year-ago quarter, including two percentage points of unfavorable foreign exchange impact. As a result, third-quarter revenue was up slightly in local currencies.

Revenue from the company’s digital businesses grew 10 percent in the third quarter, reflecting increased demand for its consumer and commercial inkjet products, packaging solutions and workflow software and services, along with a non-recurring intellectual property licensing agreement. Revenue from the company’s digital commercial printing businesses grew by 13 percent in the third quarter, including 23 percent growth in commercial inkjet printing. Consumer inkjet printer and ink revenue grew by 26% in the third quarter.

Profits from the company’s digital portfolio showed year-over-year improvement for the fourth consecutive quarter. Third-quarter revenue from the company’s Film, Photofinishing and Entertainment Group declined by 25 percent.

On the basis of U.S. generally accepted accounting principles (GAAP), the company reported a third-quarter loss from continuing operations of $43 million, compared with a loss of $111 million in the year-ago period.

Graphic Communications Group third-quarter 2010 sales were $657 million, compared with $674 million in the prior-year quarter, a 2.5 percent decline. Price/mix-related revenue declines in Prepress Solutions were essentially offset by revenue growth in Commercial Inkjet Printing, Electrophotographic Printing Solutions, and Business Solutions and Services.

Third-quarter loss from operations for the segment was $19 million, compared with earnings of $10 million in the year-ago quarter. This earnings decline includes increased investment to support future growth opportunities in Commercial Inkjet, Packaging Solutions, and Workflow Software and Services.

“Our third-quarter performance was marked by continued acceleration in our strategic digital growth businesses, positive cash generation, improved profit margins, and continued operational improvements across the company,” said Antonio M. Perez, Chairman and CEO. “I am particularly pleased with the performance of our core growth businesses—Consumer Inkjet, Commercial Inkjet, Packaging Solutions, and Workflow Software and Services. Revenue growth in these businesses continues to accelerate and in the third-quarter grew by a combined 23 percent. We also enjoyed growth in equipment unit placements, which will drive future consumable sales. All of these factors give me increased confidence that we are on track for a strong fourth-quarter performance, and continued improvement as we move forward.”

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