Eastman Kodak Co. (EK), a provider of technology products and services, Thursday reported a loss for the third quarter of fiscal 2009, compared with a profit a year ago, hurt by significant revenue decline in its business segments amid economic recession and continued restrictions in the credit markets. The company also confirmed its fiscal 2009 GAAP loss forecast.
For the third quarter, the company reported a net loss attributable to Eastman Kodak Co. of $111 million or $0.41 per share, compared with a profit of $96 million or $0.33 per share last year.
The company's third-quarter GAAP loss from continuing operations was $111 million or $0.41 per share, compared to earnings of $101 million or $0.35 per share in the same quarter last year.
Net expense items that impacted the third quarter of 2009 totaled $48 million after tax, or $0.18 per share, primarily related to restructuring charges, asset sales, and tax related items. Last year's third quarter included net benefit items of $40 million after tax, or $0.13 per share, mainly due to certain changes to the company's post-employment benefits, partially offset by restructuring and rationalization costs.
Excluding one-time items, the company's loss for the third quarter was $63 million or $0.23 per share. The company also posted loss from continuing operations, before interest expense, other net items and income taxes of $81 million, compared with earnings of $147 million in the year-ago quarter.
On average, four analysts polled by Thomson Reuters expected the company to report a loss of $0.19 per share for the quarter. Analysts' estimates typically exclude special items.
For the preceding second quarter, the company posted a net loss of $189 million or $0.70 per share, loss from continuing operations of $191 million or $0.71 per share.
Eastman Kodak's quarterly revenues were $1.78 billion, down 26% from $2.41 billion in the comparable quarter last year. The revenue decline included 2% of unfavorable foreign exchange impact. Analysts expected the company to report revenue of $1.89 billion for the quarter. For the second quarter, the company reported revenues of $1.77 billion.
Revenue from digital businesses totaled $1.21 billion in the quarter, a 26% decline from $1.64 billion in the prior-year quarter, primarily due to global recession and continued restrictions in the credit markets that are dampening commercial printing purchases. Revenue from the company's traditional business decreased 25% to $572 million in the quarter.
Based on segments, Eastman Kodak's Consumer Digital Imaging Group generated sales of $535 million, a 35% decline from the prior-year quarter, including a decrease in intellectual property royalties.
Graphic Communications Group posted sales of $674 million, down 18% from a year ago, reflecting a market-related decline of 16% in Prepress Solutions as well as associated declines in workflow. Film, Photofinishing and Entertainment Group recorded sales $572 million, a 25% decline from the year-ago quarter.
Commenting on the results, Antonio Perez, Chairman and Chief Executive Officer, Eastman Kodak, stated, "We also continue to gain significant traction with our new consumer and commercial inkjet businesses, and the productivity improvements that we've implemented thus far are helping to drive improved cash performance."
For the nine-month period, the company's net loss attributable to Eastman Kodak was $653 million or $2.44 per share, compared with a profit of $476 million or $1.66 per share a year ago. Net loss declined to $5.02 billion from $6.98 billion in the previous year period.
Among others in the sector, Japanese camera and office equipment maker Canon Inc. (CAJ) reported a sharp decline in profit for the third quarter, impacted by lower sales volumes of office equipment and other products as well as stronger yen. Net income for the quarter attributable to the company plunged 55.8% to 36.73 billion yen or 29.76 yen per share from 83.04 billion yen or 65.91 yen per share in the previous year. Net sales were 774.32 billion yen, down 21.5% from 985.99 billion yen in the prior year.
Another peer, Sony Corp. (SNE) is slated to announce its second-quarter results on October 30. Analysts are of the view that the company will report a loss of $0.37 per share on revenues of $19.17 billion.
Going forward, the company said that consistent with its seasonal trend, it expects cash and earnings performance to improve significantly in the fourth quarter of the year. According to the company, its ability to achieve significant improvement in fourth-quarter results is predicated upon a modest improvement in the market for its consumer and commercial products, the introduction of new, higher-margin digital cameras and devices, stronger demand for its Prepress products, and the benefits from a number of intellectual property transactions executed in a manner that maximize shareholder value.
The company also said that it is on track for a much improved fourth-quarter performance and achievement of its full-year earnings and cash targets.
For fiscal 2009, Eastman Kodak continues to forecast that its GAAP loss from continuing operations will be at the low end of the range $200 million- $400 million, reflecting its latest assessment of restructuring charges, interest expense, and interest income.
Further, the company now expects that total revenue decline rate for the full-year would be at the high end of the previously projected range of 12% - 18%, partially due to results to date and the company's increased focus on cash and earnings.
The company also confirmed its full-year goal to achieve positive cash generation before restructuring payments. This corresponds to a 2009 goal of net cash used in continuing operations from operating activities on a GAAP basis of not more than $250 million.
In addition, Eastman Kodak said that it is targeting 2009 segment earnings within the previously communicated range of $0 - $200 million.
EK is trading at $3.34, down $0.13, on a volume of 2.34 million shares.
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