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Kodak Reports Revenue Decline for Quarter, Digital Profits Improve

July 28, 2010
ROCHESTER, NY—July 28, 2010—Eastman Kodak Co. (NYSE:EK) reported second-quarter results that reflect continued acceleration of the company’s major growth businesses in commercial and consumer inkjet, unit growth in the company’s largest digital businesses, the continued decline of its traditional business, and operational improvements.

Revenue from the company’s digital commercial printing businesses grew 9% in the second quarter, including 18% growth in commercial inkjet printing. Consumer inkjet printer and ink revenue grew by 50% in the second quarter. Profits from the company’s digital portfolio showed year-over-year improvement for the third consecutive quarter.

Second-quarter sales totaled $1.569 billion, an 11% decrease from $1.766 billion in the second quarter of 2009. Revenue from digital businesses totaled $1.103 billion, a 6% decrease from $1.173 billion in the prior-year quarter. Film, Photofinishing and Entertainment Group revenue totaled $466 million, a 21% decline from $593 million in the second quarter of 2009.

On the basis of U.S. generally accepted accounting principles (GAAP), the company reported a second-quarter loss from continuing operations of $167 million, or $0.62 per share, compared with a loss from continuing operations on the same basis of $191 million, or $0.71 per share, in the year-ago period. Items of net expense that impacted comparability in the second quarter of 2010 totaled $31 million after tax, or $0.11 per share, primarily due to legal contingencies and restructuring charges. Items of net expense that impacted comparability in the second quarter of 2009 totaled $75 million after tax, or $0.28 per share, due primarily to restructuring charges and tax related items. (Please refer to the attached Items of Comparability table for more information.)

“We continue to gain share in our growth businesses, maintain cost discipline, and drive improved profitability,” said Antonio M. Perez, Chairman and Chief Executive Officer, Eastman Kodak Company. “Our new digital businesses, particularly consumer and commercial inkjet, continue to gain traction, with sales growth outpacing the competition. Digital commercial printing revenue, for example, grew 9% in the second quarter, consumer inkjet printer and ink revenue grew 50%, and operating margins improved in the majority of our digital product lines and for our digital business in total. We remain focused on building a leaner, more competitive company powered by innovative products that compete in large, new markets. Given the solid digital unit growth that we saw in the first half of the year, we continue to target full-year revenue of $7.5 billion to $7.7 billion, reflecting the increasing strength of our digital portfolio."

Other second-quarter 2010 details:

• The company’s second-quarter loss from continuing operations, before interest expense, other income (charges), net, and income taxes was $100 million, a $19 million improvement as compared to a $119 million loss in the year-ago quarter. This was driven by operational improvements, including productivity gains, and lower restructuring charges.
 

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