Negativity has once again started to seep into Eastman Kodak (EK). The market is concerned with the company's ability to sustain operations. The company reported losses from continuing operations of $0.83 a share compared with a loss of $0.16 in the year-ago comparable quarter. The loss mainly has to do with the absence of sizable patent licensing revenue in the third quarter. The market is also concerned with the company drawing $160 million from its credit facility.
Third-quarter sales were $1.462 billion, a 17% decrease from the year-ago quarter. Third-quarter digital revenue grew 3% excluding that year-ago intellectual property revenue and a 25% decline in the company's digital cameras & devices business. Eastman Kodak has continued to see a decline in traditional products.
The company has been working toward establishing digital growth businesses that will form the base for a new Kodak. Revenue from the consumer and commercial inkjet, workflow software & services, and packaging solutions increased 13%, fueled by 44% revenue growth in consumer inkjet printers and ink, and 89% revenue growth in Packaging Solutions.
I'm bullish on the company's new direction and expect the company to benefit from focusing on its growth businesses. In consumer Inkjet, the company saw ink gross profit dollars double in the third quarter and year-to-date. Packaging solutions sales increased 89% in the quarter and more than 130% year-to-date. In commercial Inkjet, revenue for the Prosper product line rose 40% in the third quarter.
I believe the market is overreacting to the company's financial situation and is providing long term investors an opportunity to invest in the company's turnaround. The company expects 2012 cash usage attributed to the operating businesses to decline notably, stemming from significant profitability improvements in consumer and commercial inkjet as well as digital cameras. Third-quarter 2011 cash usage (before restructuring payments) was $189 million compared with $123 million in the year-ago quarter.
I expect Kodak to successfully monetize its intellectual property. The company has been exploring strategic alternatives for approximately 1,100 U.S. digital imaging patents, which represent about 10% of its patent portfolio. There has been a lot of interest in this side of the intellectual property portfolio and I expect the market to be surprised with the valuation that the company gets once the portfolio is sold.
I view pullbacks as an opportunity to add to my position. Kodak will survive this negativity and reward those shareholders who keep the big picture in mind.