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Kodak Takes Hit in Q4, Full-Year Gross Profit Improves

January 26, 2011
ROCHESTER, NY—Jan. 26, 2011—Eastman Kodak reported 2010 results that it says reflect the success of the focused investments that Kodak is making in new products and growth businesses—digital revenue growth in key emerging markets around the world; intellectual property licensing agreements; improved profit margins; and a lean cost structure.

Full-year 2010 sales were $7.187 billion, a 6 percent decrease from the prior year. Full-year revenue from digital businesses grew by 1 percent, reflecting an 18 percent revenue increase in the company’s core growth businesses—Consumer and Commercial inkjet, Packaging Solutions, and Workflow Software and Services—and an increase in non-recurring intellectual property licensing agreements.

Full-year 2010 consumer inkjet printer and ink revenue grew by 35 percent. Traditional revenue for 2010 decreased 22 percent from the prior year to $1.767 billion.

On the basis of U.S. generally accepted accounting principles (GAAP), the company reported a full-year 2010 loss from continuing operations of $58 million, reflecting a $174 million improvement as compared with a loss of $232 million in the year-ago period. The company’s digital businesses delivered $301 million in earnings from operations for the year, a $308 million improvement from 2009.

For the fourth quarter of 2010, the company reported revenues of $1.927 billion, a 25 percent decrease from the year-ago quarter. Revenue from the company’s core growth businesses increased by 23 percent, while overall digital revenue totaled $1.488 billion, a 25 percent decrease from $1.991 billion in the prior-year quarter.

This revenue decline largely reflects the timing of intellectual property licensing revenues as well as industry-related pricing pressures in Prepress Solutions and Digital Capture & Devices, partially offset by the revenue increase in the company’s core growth businesses. Revenue from the company’s traditional business decreased 25 percent to $439 million for the fourth quarter.

For the fourth quarter, the company reported earnings from continuing operations of $33 million, compared with earnings on the same basis of $430 million in the year-ago period, primarily reflecting lower intellectual property licensing revenues in the fourth quarter of 2010.

“In a year with significant external headwinds affecting a number of industries in which we participate, I am very encouraged by the performance of our key digital growth businesses, which will form the basis of Kodak’s digital future,” said Antonio M. Perez, chairman and CEO, Eastman Kodak. “During 2010, these new businesses grew by a combined 18 percent, and all of our digital businesses as a group delivered more than $300 million in earnings for the year. This was our best digital earnings performance ever, and in line with our segment earnings forecast for the year. We also delivered positive cash generation in the fourth quarter and ended the year with more than $1.6 billion in cash on our balance sheet.

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