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

• Consumer Digital Imaging Group full-year 2010 sales were $2.739 billion, a 5 percent increase from the prior year. Full-year earnings from operations for the segment were $330 million, a $295 million increase from the prior year. The year-over-year improvement was driven by intellectual property licensing transactions and improving profitability in Consumer Inkjet, which doubled gross profit dollars from ink during 2010. This was partially offset by declines in Retail Systems Solutions.

For the fourth quarter, sales for the segment were $731 million, a decrease from $1.212 billion in the prior-year quarter. Fourth-quarter loss from operations was $57 million, compared with earnings on the same basis of $380 million in the prior-year quarter. These earnings results were primarily driven by a non-recurring intellectual property licensing transaction in the prior-year quarter.

• Film, Photofinishing and Entertainment Group full-year 2010 sales were $1.767 billion, a 22 percent decline from the prior year. Full-year 2010 earnings from operations for the segment were $62 million, compared with $159 million in the prior year.

Fourth-quarter sales were $439 million, a 25 percent decline from the year-ago quarter. Fourth-quarter loss from operations for the segment was $3 million, compared with earnings on the same basis of $53 million in the year-ago period. This decrease in earnings was primarily driven by industry-related declines in volumes and increased raw material costs, partially offset by cost reductions across the segment.

• For full-year 2010, total segment earnings were $362 million, within the company’s previously communicated range of $350 million to $450 million. This corresponds to earnings from continuing operations before interest expense, other income (charges), net and income taxes of $283 million, which was within the company’s previously communicated range of $275 million to $375 million.

Other 2010 details:

• For full-year 2010, Gross Profit margin was 27.1 percent of sales, an increase from 23.2 percent in 2009. This increase was primarily driven by intellectual property licensing transactions. Fourth-quarter 2010 Gross Profit margin was 19.4 percent, a decrease from 34.4 percent in the year-ago period, primarily the result of a significant intellectual property licensing transaction in the fourth quarter of 2009.