28 July 2010
Eastman Kodak’s total sales have dropped 11 percent in the second quarter to $1.5 billion compared with $1.7 billion over the same period last year.
The OEM’s consumer digital imaging group second quarter sales plummeted to $447 million, from $503 million in the three months to the end of June 2009. Second quarter loss from operations in this segment was $110 million, compared with a loss of $99 million in the same quarter last year.
Kodak blamed this decline on the loss of an important customer contract. “This decrease in earnings was largely driven by the expiration of a significant Retail Systems Solutions customer contract and increased advertising investment, partially offset by improved profitability in Consumer Inkjet Systems and Digital Cameras and Devices,” said the giant.
However, the report is not all negative as Kodak’s revenue from its commercial printing business grew nine percent in the second quarter, including 18 percent growth in commercial inkjet printing. Consumer inkjet printer and ink revenue grew by 50 percent in the second quarter.
The business, which has found it difficult to move forward in the digital imaging sector, also posted a gross margin rise to 19.3 percent from 18.5 percent in the second quarter in 2009.
Many critics, such as industry Analyst Charles Brewer, have argued that Kodak has remained “stubbornly reliant on its film business”. Today’s results show a 21 percent decline in this area, compared to last year.
Antonio Perez, Chairman and CEO, said: “We continue to gain share in our growth businesses, maintain cost discipline, and drive improved profitability. Our new digital businesses, particularly consumer and commercial inkjet, continue to gain traction, with sales growth outpacing the competition.
“We remain focused on building a leaner, more competitive company powered by innovative products that compete in large, new markets. Given the solid digital unit growth that we saw in the first half of the year, we continue to target full-year revenue of $7.5 billion to $7.7 billion, reflecting the increasing strength of our digital portfolio.”