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Thursday, October 30, 2008

Kodak's Revenue Falls, Outlook Dims

Lauren Covello

FOXBusiness

Photography-products company Eastman Kodak (EK) said its profit zoomed higher in the third quarter, but sales failed to meet Wall Street’s estimates and the company slashed its forecast for the full year.

The Rochester, N.Y.-based company reported quarterly earnings of $96 million, or 33 cents a share, compared with $37 million, or 13 cents a share, a year earlier. Revenue declined 5% to $2.41 billion, as growth in the digital products segment was eclipsed by by an 18% drop in its traditional businesses.

Excluding special items, the year’s profit was in line with analysts’ estimates of 22 cents a share, but revenue fell short of the $2.53 billion Wall Street was expecting.

"We remain confident that our strategy is sound, but given today's challenging economic climate, we are taking a number of specific actions to strengthen our operations going forward,” said Kodak Chairman and Chief Executive Antonio M. Perez.

The company saw a 7% increase in its digital business, propelled by cost improvements in digital cameras, digital photo frames and increases in intellectual property licensing, but its Film Capture and Traditional Photofinishing units experienced lower sales volume and higher commodity costs which overshadowed the gain.

Citing “unprecedented” economic uncertainty, Kodak believes its full-year revenue growth will decline by 3% to 5% -- a sharp contrast from the flat to 2% growth projection it had previously forecasted. The company also sliced its outlook for earnings from operations in half.