Eastman Kodak posts another loss as sales, shares stumble

ROCHESTER, N.Y. — Eastman Kodak Co. posted a smaller first-quarter loss Friday — its ninth quarterly deficit in the last 2 1/2 years — as it applies the final cost-cutting touches to a drastic digital makeover. The results still missed Wall Street expectations and its shares dipped nearly 5 percent.

The photography company lost $151 million, or 53 cents a share, in the January-March period versus a loss of $298 million, or $1.04 a share, a year ago when it took hefty charges tied to its massive overhaul.

Sales fell 8 percent to $2.12 billion from $2.89 billion a year ago, hurt by Kodak's move away from lower-priced cameras in favor of marketing pricier but more profitable models.

Its overall digital sales fell 3 percent to $1.2 billion, while revenues from film, paper and other traditional, chemical-based businesses slumped 13 percent to $896 million.

Excluding one-time items totaling $76 million, or 26 cents a share, Kodak lost $98 million, or 35 cents a share. Analysts surveyed by Thomson Financial had forecast a loss of 2 cents a share on sales of $2.1 billion.

In last year's first quarter, Kodak's operating loss was $157 million, or 55 cents a share.

Its shares fell $1.25, or 4.8 percent, to $24.72 Friday. They have traded in a 52-week range of $18.93 to $27.57.

Now in the final stretch of a costly four-year shift away from its shrinking film business and into the highly competitive digital arena, Kodak has piled up $2.7 billion in restructuring charges and accumulated $2.1 billion in net losses over the last 10 quarters.

Cost-cutting "is working and it's progressing fast," with costs dropping to 19 percent of revenues from 22 percent a year ago, said Ulysses Yannas, a broker with Buckman, Buckman & Reid in New York.

"It's been an awful four years," he said. "That's what happens when you make some mistakes in the past."

Many analysts think Kodak waited too long to acknowledge its analog businesses were in an irreversible slump. In September 2003, it finally outlined an ambitious strategy to become a digital heavyweight in photography and commercial printing by 2008.