Imaging technology products and services porvider, Eastman Kodak Co. (EK) Thursday reported profit for the fourth quarter compared to a loss last year, helped by 12% increase in revenue from digital businesses and the conclusion of intellectual property licensing agreements.
Rochester, New York-based Eastman Kodak's fourth quarter net income attributable to the company was $443 million compared to a loss of $918 million in the year-ago period.
The company's fourth quarter profit from continuing operations was $430 million or $1.36 per share compared to a loss of $914 million or $3.40 per share in the same quarter last year.
Profit for the quarter reflects the focused investments the company is making in new products and growth businesses, which includes consumer and commercial inkjet and digital plates, the successful conclusion of intellectual property licensing agreements, improved profit margins, and a lean cost structure.
Net benefit that impacted the recent quarter, totaled $90 million after tax or $0.28 per share, primarily related to benefits from asset sales and tax-related items, partially offset by restructuring charges and other miscellaneous items. In the prior year quarter, the company recorded net expense of $893 million after tax or $3.32 per share, primarily related to a goodwill impairment charge, restructuring charges, a legal contingency, and tax-related items.
On an average, four analysts polled by Thomson Reuters expected the company to earn $0.18 per share for the quarter. Analyts' estimates typically exclude one-time items.
For the third quarter, net loss attributable to Eastman Kodak was $111 million or $0.41 per share, compared with a profit of $96 million or $0.33 per share. GAAP loss from continuing operations for the third quarter was $111 million or $0.41 per share, compared to profit of $101 million or $0.35 per share in the same quarter last year.
For the fourth-quarter, Eastman Kodak's sales were $2.6 billion, up 6% from $2.4 million in the comparable quarter last year. The increase in sales included 4% of favorable foreign exchange impact. Analyts expected revenue estimate of $2.38 billion for the quarter. Sequentially sales were up 45%. In the third qurater, sales were $1.78 billion, down 26% from $2.41 billion in the year-ago period.
Revenue from digital businesses totaled $1.9 billion, a 12% increase from $1.779 billion in the prior-year quarter, resulting from the combination of an increase in non- recurring intellectual property licensing revenue and increased demand for consumer inkjet printer systems, kiosk media and digital plates.
Traditional business revenue reduced 10% to $589 million in the fourth quarter compared to the first three quarters, mainly due to improved demand across all traditional businesses, especially Entertainment Imaging.
On a segmental basis, Eastman Kodak's Consumer Digital Imaging Group sales were $1.2 billion, up 27% from the prior-year quarter. Earnings from operations for the segment was $380 million, compared with a loss of $41 million in the year-ago quarter, reflecting higher non-recurring intellectual property licensing revenue, improved profitability in consumer inkjet systems, including an 81% revenue increase in consumer inkjet printer hardware and ink, improved operating performance in Digital Capture & Devices and Retail Systems Solutions and reduced SG&A expenses across the segment.
Graphic Communications Group generated sales of $779 million, down 5% from a year ago period. Film, Photofinishing and Entertainment Group recorded sales $589 million, a 10% decline from the year-ago quarter.
Quarterly, gross margin was 34.4% of sales, an increase from 20.4% in the year-ago period. The increase was driven by 6% growth due to productivity improvements and higher demand for digital plates and kiosk media, productivity gains for digital cameras and devices, consumer inkjet, electrophotographic printing and traditional photofinishing, and favorable foreign exchange. The growth was also due to non-recurring intellectual property licensing agreements.
Interest expense for the quarter, increased to $44 million from $28 million, mainly due to the issuances of $300 million aggregate principal amount of 10.5% Senior Secured Notes due 2017 and $400 million aggregate principal amount of 7% Convertible Senior Notes due 2017, in the third quarter of 2009.
Antonio Perez, chairman and chief executive officer said, "our cost structure is providing us with significant operating leverage as the economic recovery continues. We enter the new year with the most competitive digital portfolio ever, strong presence in key markets, and a significant amount of positive momentum. All of this positions us well for improved performance in 2010."
For full-year, Kodak reported a decline in loss from continuing operations of $232 million or $0.87 per share from $727 million or $2.58 per share in the prior year. Revenue totaled $7.6 billion, 19% down from $9.4 billion last year. Full-year digital revenue declined 17% to $5.3 billion and traditional revenue was $2.2 billion, 24% down from the prior year period.
Analyts expected the company to report a loss of $1.47 per share on revenue of $7.40 billion for the full year.
Among peer group, Japanese camera and office equipment maker Canon Inc. (CAJ ),reported fourth quarter net income attributable to Canon of 61.56 billion yen, compared to 11.62 billion yen last year. Net sales declined to 954.06 billion yen from 994.74 billion yen in the prior year quarter
EK is currently trading at $5.60, up $0.85 or 17.89% on a volume of 41.69 million on the NYSE.
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