Kodak Unveils Reorganization Plan, Enjoys Strong Q1
Both of the company’s Commercial Imaging segments recorded significant improvements in segment earnings. The Digital Printing and Enterprise (DPE) segment reported a segment loss of $8 million for the quarter, an improvement of $81 million from the $89 million segment loss in the prior year quarter. The improvement was driven primarily by the previously announced strategic decision to focus the consumer inkjet business on ink sales, as well as improved operating costs. The DPE segment had a 21 percentage point increase in gross profit margin in the quarter.
The Graphics, Entertainment and Commercial Films (GECF) segment reported $38 million in segment earnings for the quarter, compared to a segment loss of $84 million in the prior year, an improvement of $122 million. The current quarter earnings reflected $31 million in non-recurring brand licensing revenue, which combined with the $61 million reduction in revenue from intellectual property in the prior year resulting from a withholding tax refund, contributed $92 million of the year-over-year improvement. The remaining improvement was driven by pricing actions and operating cost reductions. The GECF segment had a 24 percentage point increase in gross profit margin in the quarter versus the prior year.
“These results demonstrate that we are on track with our strategy to focus on Commercial Imaging, and that we are making operational improvements as Kodak takes the right steps to emerge as a profitable and sustainable company,” Perez remarked. “We have the right strategy and the right technology and products to extend our leadership in the industry.”
Kodak’s cash balance at the end of the first quarter stood at $1.17 billion, an increase from the $1.14 billion reported at the end of 2012. Sales from continuing operations totaled $849 million in the quarter, a 9 percent decrease from the $928 million in the previous year’s quarter.