Kodak Reports 17 Percent Decrease in Revenues
Eastman Kodak Company reported steady progress toward becoming a profitable and sustainable digital company as third-quarter digital earnings improved, excluding non-recurring patent licensing revenue in the prior-year period, and sales increased in its core digital growth businesses. Total company revenue declined largely because of lower sales of traditional products, a planned reduction in digital camera sales, and the absence, compared to the year-ago period, of significant non-recurring patent licensing revenue.
Third-quarter sales were $1.462 billion, a 17 percent decrease from the year-ago quarter or only 5% when excluding the benefit of a $210 million non-recurring patent licensing transaction in the year-ago period. Third-quarter digital revenue grew 3 percent excluding that year-ago intellectual property revenue and a 25 percent decline in the company's Digital Cameras & Devices business, which reflects the strategic decision this year to trade revenue for improved earnings. Revenue from the core digital growth businesses - Consumer and Commercial Inkjet, Workflow Software & Services, and Packaging Solutions - increased 13 percent, fueled by 44 percent revenue growth in Consumer Inkjet printers and ink, and 89% revenue growth in Packaging Solutions. The revenue decline rate for the company's Film, Photofinishing and Entertainment Group slowed to 10% in the third quarter.
On the basis of U.S. generally accepted accounting principles (GAAP), the company reported a third-quarter loss from continuing operations of $222 million, or $0.83 per share, compared with a loss from continuing operations on the same basis of $43 million, or $0.16 per share, in the year-ago period. The results largely reflect the absence of sizable patent licensing revenue in this year's third quarter versus the year-ago period and the continued secular decline of traditional products¸ partially offset by better operating performance, excluding non-recurring intellectual property revenue, in the company's digital businesses.
Non-operational items of net benefit in the third quarter of 2011 totaled $2 million after tax, or $0.00 per share, primarily due to tax-related items, substantially offset by restructuring charges, impairments, and corporate components of pension and other post-employment benefit costs. Non-operational items of net expense in the third quarter of 2010 totaled $13 million after tax, or $0.05 per share, primarily due to restructuring charges and tax-related items, partially offset by corporate components of pension and other post-employment benefit costs.