Kodak Reports Drop in Third-Quarter 2009 Results; Touts Operational Improvements
For the third quarter of 2009:
• Sales worldwide totaled $1.781 billion, a decrease of 26% from $2.405 billion in the third quarter of 2008, including 2% of unfavorable foreign exchange impact. Revenue from digital businesses totaled $1.209 billion, a 26% decline from $1.641 billion in the prior-year quarter, primarily as a result of the global recession and continued restrictions in the credit markets that are dampening commercial printing purchases. Revenue from the company’s traditional business decreased 25% to $572 million, in line with the industry decline.
• The company’s third-quarter loss from continuing operations, before interest expense, other income (charges), net, and income taxes was $81 million, compared with earnings on the same basis of $147 million in the year-ago quarter.
On the basis of U.S. generally accepted accounting principles (GAAP), the company reported a third-quarter loss from continuing operations of $111 million, or $0.41 per share, compared with earnings on the same basis of $101 million, or $0.35 per share, in the year-ago period. Items of net expense that impacted comparability in the third quarter of 2009 totaled $48 million after tax, or $0.18 per share, primarily related to restructuring charges, asset sales, and tax related items. Items of net benefit that impacted comparability in the third quarter of 2008 totaled $40 million after tax, or $0.13 per share, due primarily to certain changes to the company’s post-employment benefits, partially offset by restructuring and rationalization costs. (Please refer to the attached Items of Comparability table for more information.)
Other third-quarter 2009 details:
• Gross Profit was 20.3% of sales, a decline from 27.5% in the year-ago period. This decline in margin was driven by lower intellectual property licensing royalties and unfavorable foreign exchange, partially offset by continued productivity improvements.
• Selling, General and Administrative (SG&A) expenses, on a GAAP basis, were $318 million in the third quarter, down 14%, or $51 million, from $369 million in the year-ago quarter, as a result of company-wide efficiency gains. Excluding a non-cash benefit from a change in the company’s post-employment benefits in the prior year quarter, the company reduced SG&A expenses, relative to the prior year quarter, by $78 million, or 20%.