Kodak Reports Q2 Loss, Expects Improved Second Half of 2009
* Graphic Communications Group second-quarter 2009 sales were $670 million, a 24% decline from the second-quarter of 2008, including 5% of unfavorable foreign exchange impact. This revenue decrease was primarily driven by a market-related decline of 27% in Prepress Solutions as well as associated declines in workflow. Second-quarter loss from operations for the segment totaled $28 million, compared with earnings of $13 million in the year-ago quarter. This earnings decline was primarily driven by lower volume and price/mix across several product lines, along with a negative impact from foreign exchange, partially offset by operational improvements in Electrophotographic Printing Solutions.
* Film, Photofinishing and Entertainment Group second-quarter sales were $593 million, a 30% decline from the year-ago quarter, including 6% of unfavorable foreign exchange impact. Second-quarter earnings from operations for the segment were $51 million, compared with earnings of $54 million in the year-ago period. These earnings results were driven by declines in consumer film sales volumes, price/mix across several product lines and unfavorable foreign exchange impacts, primarily in Entertainment Imaging, largely offset by operational improvements in Traditional Photofinishing, significant cost reductions across the segment, improvement in raw material costs, and the impact of previously announced changes in post-employment benefits.
For 2009, on a continuing operations basis, Kodak remains focused on three key financial goals, which the company first announced at its February investor meeting: digital and total company revenue, earnings from operations, and cash generation. The company today provided an updated outlook regarding its targets for 2009 performance against these metrics, recognizing the ongoing uncertainty created by the global economic environment.
* For the second half of 2009, Kodak is targeting digital revenue to grow by 1% to 3% and total company revenue to decline 4% to 6%. This is contingent upon the introduction of new, higher margin digital cameras and devices, achievement of intellectual property licensing revenues and demand improvement in Prepress products. For the full-year 2009, the company is targetingto be within the ranges that it presented in its February forecast, including a digital revenue decline of 6% to 12% and a total revenue decline of 12% to 18%.